How Competitive is the Market for Buyers?

Here's an example that demonstrates how competitive the Madison area real estate market has become for home and condo buyers...We recently listed a home for sale in a neighborhood with less than a month of supply. Seventy-five percent of the listings in this neighborhood were under contract and scheduled to close soon. This home was also positioned in a very popular price point. Everything we knew about this listing suggested the response to this home would be very strong. 

As it turned out this property had 30 private showings in 4 days as well as another 30 parties who attended the Sunday open house. By the end of the fourth day six offers were on the table.

Every offer was strong

• Six of six offers were for above the full list price. The lowest offer was $5,000 over. Two offers were more than $10,000 above the list price. 
• All of the offers included a pre-approval letter from a local credit union or bank. 
• Five of six offers included a down payment of 20% or more. 
• Three of six offers included an above average amount of earnest money. 
• None of the offers included a radon testing contingency - even though the home has a finished basement. 
• None of the buyers asked the sellers to pay for a home warranty. 
• Two of the offers didn't include an appraisal contingency. 
• One of the offers excluded the home inspection contingency (a gutsy play). 
• Three buyers submitted a personal letter with their offer. 

About the winning buyer

It's no surprise the offer with the fewest contingencies was accepted. The winning buyer also submitted a personal letter. It's almost as if this buyer read our 15 tips for writing an offer in a hot market.

This home sale provides a great example of how competitive the market has become. Check out these articles for more home buying tips. In this year's market it's important to consider every single strategy that will help you gain a competitive advantage.