In today’s competitive market, how can buyers get their offers accepted?
In our current market, many sellers are getting multiple offers for their homes. The question for buyers is how to get their offers to stand out so that they’re more likely to be accepted by the seller. Today I’ll share my tips for crafting a competitive offer:
1. Know your financial situation. Be careful not to overextend yourself; it can be very easy to do in today’s environment. Work with your lender and Realtor to develop a strategy before you make the offer. Know how much your down payment and earnest money deposit will be, and look into what inspections you will and won’t do.
2. Find out what’s important to the seller. By asking your Realtor to contact the seller’s representative, you get insight into the seller’s motivations and can craft your offer accordingly. For example, if they need a quicker closing date or a rentback agreement, that’s something to include in your offer.
3. Write a personal note. By writing a personal note to the seller, you can add an emotional element to the offer that lets them know why their home is so important to you and what you intend to do with it. Make sure that your letter is short and sweet, and don’t be afraid to include a picture of your family and pets.
4. Put your best foot forward. Make your first offer your best offer. In this competitive market, you can’t afford to make an offer under asking price and hope to be able to negotiate.
“Be careful not to overextend yourself.”
5. Appraisal. If you’re going to increase your offer or add an escalation clause, the seller’s biggest concern is going to be about the appraisal. They’ll be worried that if you write an offer that’s over asking price, you’ll later come back and renegotiate it when the appraisal comes in lower than the actual sale price. In this situation, you can use a Form 22AD, which is an increased down payment for a low appraisal form. Bear in mind that you’ll need to be financially capable of making that happen, so don’t jump the gun before you determine if it’s financially feasible.
6. Escalation clause. This is a clause in the contract that states you’ll offer a certain amount more than the highest offer that comes in, up to a certain capped amount. The good thing about this form is that you may not use the full amount that you said you’d escalate to if the seller has other offers.
7. Waiving inspection contingencies. How effective this is depends on the age and condition of the house, as well as your tolerance levels. Understand that there is some risk involved in waiving the inspection. You could also try doing a pre-inspection using Form 35P, which allows you to access the property before the offer has been accepted.
8. Be prepared to pass on a home that’s too expensive. This might be tough, but it might be something you’ll have to do. There will be other houses on the market, so try to be patient.
If you have more questions about making an offer on a home or anything else to do with real estate, don’t hesitate to reach out to us. We’d love to help you.
