Massachusetts single-family home sales hit a 10-year high for February!!

The Massachusetts Association of Realtors reported that pending sales of single-family homes has hit a 10-year high for the month of February.

The number of single-family homes put under agreement increased to 3,587 last month, a 20.4 percent increase compared to the year-earlier period when 2,980 homes went under agreement. February marked the 12th-straight month of year-over-year increases and the most homes put under agreement in February since 2004, when there were 3,612 homes placed under contract. On a month-to-month basis, single-family homes put under agreement rose 13.8 percent compared to the 3,151 homes put under agreement in January.

With the market picking up fiercely, so do the bidding wars!! 

There are ways to get the property that you have your heart set on when it comes down to a bidding war.

It’s Hard to Beat Cash
All-cash offers were 28 percent more likely than financed offers to win a bidding war, sometimes even when the offer is below asking price!  A cash offer tells the homeowner that they don’t have to deal with mortgage companies or financing that may possibly fall-through!

Waving Contingency’s

In 2013, offers with a waived financing or inspection contingency were 15 percent more likely than contingent offers to win a bidding war. Standard in most offer contracts, these contingencies protect you from losing your earnest money in the event that you back out of the deal because your lender can’t approve your loan in time or if you decide you no longer want the home after the inspection. Waiving the financing contingency guarantees to the seller that you’ll come through with the money if your lender doesn’t. Like the pre-inspection strategy, a waived inspection contingency makes your offer more attractive by letting the seller know you’re not going to back out or try to negotiate for home repairs.

*However, waiving contingencies presents more risk than many buyers care to take on, so it’s important to talk with your agent about whether this strategy makes sense for you.

Pour Your Heart Out
Tugging at the seller’s heart strings by sending them a personalized letter explaining how much you love their home and how well you’ll care for it actually helps seal the deal. Compared to offers that did not include a cover letter, offers with personal notes were 9 percent more likely to win a bidding war. “Love letters work because they get the seller to relate to you on a personal level, so they see you as more than just a dollar amount,”

Which Strategy Should You Use?

Cash, if you have it!  You should always go into a bidding war with a clear idea of how much the home is worth to you, and how far you’re willing to go to win it. Don’t do anything you’ll later regret, which for many buyers includes waiving your right to negotiate the price or back out after the inspection.

The bidding war strategy ranking was determined by comparing the percentage of offers that used a given strategy successfully (won the bidding war and closed) with the percentage of offers that did not use the strategy and still won the bidding war. While all five strategies improved buyers’ chances of success, some did so to a greater extent than others, and some tactics packed a bigger punch in one city than another.

You have to Decide, How Much do You really Want the House??