You’ve found the perfect home, trouble is everyone else has, too.
The real estate market has turned and tight inventory means bidding wars on the best priced homes. Here are 10 tips you can implement when making an offer that will help you come out on top.
- Make the highest earnest money deposit you can. If you are serious about the home and the purchase, why not put some teeth in your offer and assure the Seller you are going to put your money where your mouth is.
- If possible find out the seller’s ideal closing date ahead of time and give them the date they need. If you cannot find out what the seller’s preference is, offer a range for closing that the seller can choose from. This is especially important if the seller is living in the home and trying to close on a new purchase as they may possibly not even know where they are moving to.
- Waive the finance contingency. After all, a finance contingency is simply you asking the Seller to take responsibility for the successful outcome of your mortgage application. By removing the finance contingency you are moving the risk of the mortgage process off the seller’s side of the negotiation table and putting it on your side. If you are uncomfortable removing the finance contingency than considering tightening the time lines by being pre-approved and let your seller know you will order the appraisal right away rather than waiting for the end of the inspection period.
- Whether you waive the financing contingency or not, if you are counting on a loan to close the loan a pre-approval letter from your lender is a must. You may also want to include a release of information that will allow both your broker and the seller’s broker access to speak to your lender about the loan process. This helps assure the seller that you are making a good faith effort to close on the loan.
- Waive the appraisal review, but only if you are sure you have enough cash on hand to cover the difference in value if the appraisal comes in low. You can also put in an appraisal bumper, where you agree to pay a certain dollar amount over a low appraisal but you cap the amount so that you don’t get into trouble.
- Show them the money. If you say you have a 20% down payment, or even a 3.5% down payment, provide a bank statement that shows you have the money you say you do. Countless transactions fall apart because the buyer was using money tied-up in stocks or grandma’s inheritance. Most purchase & sale contracts have a provision that states you actually have cash in the bank for the amount you claim, so why not make this a positive piece of the offer to help get you the home.
- Keep all your time-lines short. Don’t ask for 10 days to have an inspection if you can get it done in 3 to 5 days. Shorten the review on any title or home owner association documents to as little as you reasonably need for your own comfort.
- Speaking of inspections, if possible pre-inspect the home. Only do this if the seller is delaying review of offers and with the seller’s written permission, after all the best way to get your offer accepted is to NOT be in a bidding war. If you like the home do not delay, make the offer now.
- If you can’t pre-inspect, assure the seller in writing that your purpose is limited to major structural or safety issues and that you will not nickel and dime them by asking for minor repair work.
- With the insight of the listing agent you may consider writing a personal love letter. It is the rare exception where I’ve worked with a seller who wasn’t flatter by a nice SINCERE letter showing appreciation for the love of a home, the quality of craftsmanship or the attention to detail. (and yes do this for new construction too, everyone wants to be noticed for their work) A letter takes a very dry contract full of numbers and legal jargon and puts a person into the transaction.
Notice we didn’t talk about price here at all? Obviously price is a huge factor and only an experienced REALTOR familiar with your situation and the local market can give you advice on what to offer and the terms that go with it. However if these factors will help you edge out other offers in a multiple offer situation, imagine how they might work at getting your offer accepted without competition.
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