If you're a Denver resident who is tired of apartment living, you may be slightly worried about the speed with which homes enter (and exit) the housing market and wonder whether the housing carousel is moving too fast for you to grab a seat. In fact, the Denver housing market was recently deemed the hottest in the country, with 70 percent of newly-listed homes going under contract within two weeks, frequently for more than the listing price. While this speed can be great for the local economy, it is also frustrating for those who have made offers on multiple suitable homes with no bites. Read on to learn more about keeping your bids competitive and improving your odds of acceptance when battling multiple bidders in a quickly-moving market.
What should you look for in a Denver home?
Unless you have a significant trust fund or have recently won the lottery, it's likely that your home search is taking place subject to a budget. Because it can be more difficult to determine the "true" sale price of a home that is likely to go for more than list price, you'll usually want to concentrate your search in neighborhoods where the listing price of most (if not all) homes is within your budget. This will give you a bit more leeway when it comes to increasing your offer.
You'll also want to keep some of the less tangible sales criteria in mind -- like school district. Purchasing a home in a good school district can help it retain value upon resale, while purchasing one in a district that's struggling could make it more difficult to sell your home when the time comes.
What can you do to improve the odds of your bid being accepted?
Although most markets will permit the prospective buyer to make an offer for list price (or slightly under list price) without harming his or her odds of acceptance, in a hot or quickly-moving housing market, many homes tend to sell for far more than the list price. This can make it difficult to determine an offer price: too low, and it won't be considered; too high, and it could be throwing money away if the seller had been willing to accept a lower amount.
You should be able to get around this issue by adding in an escalation clause to any offers you make. This will allow you to make an initial low offer, but "escalate" the purchase price to a certain previously-set amount, potentially allowing you to come out on top even if your initial offer was too low to reasonably be accepted.