Seller’s markets exist when there are a lot of buyers competing for a low inventory of active listings. It isn’t unusual for a home with all the bells and whistles to draw offers from more than one buyer. When this happens, the house often sells for more than list price, but the price isn’t everything to a seller. Sometimes there are other factors that are important to the sellers. The buyer’s agent’s job is to uncover this!
Here are 10 tips that will help you write that winning offer and beat out the competition.
- Put Your Best Foot Forward
Write your very best offer, leaving only a little room for negotiation. You might get only one chance to make an impression on the seller, so don’t make a low offer in hopes that the seller will give you a counteroffer. With multiple offers the seller will most likely only work with the top two and there is always a chance the top offer will walk away with the house without a counter offer.
- Hire A Hyper Local And Assertive Real Estate Agent.
Relationships are very important in this business, and finding a local agent who is familiar with the way other agents present and handle multiple offers can be the difference between getting an offer accepted and not. In addition, an agent who constantly combs the marketplace and networks with other agents is more likely to get a lead on your new home before anybody else, which is why you need to hire a good agent who is on top of the market.
- Write a “Friendly Offer”
Write an offer that is kind to the seller. If it is customary in your area to pay half of the transfer fees, then don’t ask the seller to bear that cost. If the sellers have lived in their home for the last thirty years you may want to ask their agent if they need a short rent back after closing and allow them to stay in the property after closing to finish packing up free of charge. These small gestures sometimes go a long way.
4. Putting Down a Healthy Earnest Deposit
Putting down a larger earnest deposit shows you are serious and willing to put your cash on the table. Sellers will feel you are more committed if you put down 4% instead of the standard 3% which is the standard for your area. In other words an extra 1% tells the seller “I am committed to buying this home.” Make sure you understand what this means if you do not intend to comply with your contractual obligations and see the contract to closing.
5. Offer to Close Quickly
Unless there are extenuating circumstances, many sellers prefer to close within 30 days or fewer. If you can offer a 21-day closing time frame, for example, that might give you the edge you need to beat out the competition. For some sellers, closing quickly can be more important than an offer for more money.
6. Wave Some or all of the Contingencies
If you have spoken to your lender and gone over all the inspections and disclosures and feel comfortable risking your deposit, you might want to consider waiving contingencies such as those for loans, appraisals, or inspections. However, there are risks to this strategy. If you waive an appraisal contingency and the home appraises below your sales price, you will need to make up that difference in cash. Keeping those potential drawbacks in mind, waiving contingencies can make your offer more appealing than a competitor’s.
7. Get a Pre-Approval letter from the bank Not Prequalification letter
A fully underwritten pre-approval is the best and most comprehensive mortgage pre-approval a homebuyer can receive when they want to buy a house as it is actually a conditional mortgage approval. Generally, prequalification involves a basic review of your creditworthiness to determine if you’re likely to qualify for a loan. If at all possible opt for a Pre-approval which is fully underwritten from a local bank. Once the offer has been submitted, have the lender call the listing agent and introduce themself and explain the buyer’s credit worthiness.
8. If You Must Write Contingencies Make it a Short Timeline
If for some reason the seller has not done the inspections or you did not get all the seller’s disclosures and you need to add a contingency period try to keep them as short as possible. By default in most residential purchase contracts it gives a buyer 17 days for an inspection contingency period. Try to shorten that to 7-10 days. If you are planning to get a home inspection, be sure to check this time frame is sufficient.
9. Write the Seller a letter
If the seller has five offers on the table, but your offer includes a letter that is personally handwritten by you, your offer will stand out. In your letter, you will want to appeal to the seller’s emotions by explaining why you are in love with the home. List all the reasons why your offer should win. If you can evoke tears of joy, or induce empathy from the seller, your offer will likely win. Keep in mind that, in some cases the listing agent may not present your letter until the end of the offer process; however the agent is human and will know you have written the letter. My advice is.. It can’t hurt unless the agent especially requests “No buyer letters”.
10. Cash Talks
It goes without saying if you can pay all cash then say ” so”. This may seem unnecessary, since it’s always “all cash” in the end to the seller, even if the buyer obtains a loan. However, this lets the seller know that your transaction is not dependent on receiving loan approval, which makes you a more attractive buyer. At the end of the day the seller is going to get the same amount of money either way from the bank, however it will be a much quicker close than the typical 21-30 days to close escrow.
Who You Work With Matters!
There are very few things in life you will invest in that are as expensive and important as a home. Whether you are looking to buy your first home, a larger home for your growing family, or considering downsizing for the next stage in your life, you need a Realtor® that understands what your objectives are and is armed to represent you in a way that will guarantee the best outcome for your specific situation. If you are considering buying a home, contact me today for a free, no-obligation consultation. I’d love to show you what I can do for you to help your real estate dreams a reality.