Making your offer stick
We all know those neighborhoods. The one that everyone talks about but no one can ever move to. The neighborhood that is established and hardly ever has a house listed for sale. And once that house is listed it is sold within hours after getting multiple offers and sells above list.
How do you compete in a neighborhood like that? Especially if you are financing? Have no fear! There are some established strategies to help get your foot in the door and have your offer accepted.
Whenever you decide to make an offer on a home it is important to be aware of how complex and detailed an offer can be. Understand what you can do to make your offer stand out to the seller in order to be top of mind when the seller makes a decision.
Offer a quicker closing
Most buyers assume that cash deals can always close faster than a financing one. This is not always the case. Some loan officers can start the underwriting process before you find a specific house to purchase. Once you do put an offer in most of the underwriting work has already been done and the lender only needs an appraisal on the property you chose. A quicker closing is almost always preferable for a seller and might be the difference between buying the home or having to continue searching.
Bring extra cash to negate appraisal risk
If a house is in a popular neighborhood and you know that it has multiple offers, the house can sell above the asking price. Most people assume that only cash offers above the list price will hold any weight with the seller. This is not necessarily true. If you have extra cash you can word your offer to agree to pay a certain amount above the appraisal. This can keep you in the running for the home.
No regrets
If you can live without the home you can afford to leave room to negotiate. So don't be too aggressive on your initial offer. If this is THE home for you be sure and put your best foot forward to give yourself the best chance at acceptance. You want to come up with the price that even if you lose out on the house, you have no regrets because you gave it your all.
Escalation clauses are a way that you can present your highest possible price to beat out other offers without guaranteeing that you will pay the highest amount. It all depends on the other offers the home gets. It can be a good strategy but you will want to talk with your agent about the pros and cons.
At the end of the day, you want to make your offer as straightforward as possible. If your offer has confusing requests or contingencies the seller might pass on your offer even if you are offering more money!
Make it personal
Sometimes all offers look the same to a seller or there is little that distinguishes the right offer from others. Writing a personal letter can be a tie-breaker. Write to the seller about who you are and why you love the home. Write specifically about the home you are putting an offer on. Not a generic letter about why you want to be a homeowner.
Keep in mind if your offer is weak this will not suddenly change the owner's heart and give the house to you at a loss. This is just a simple way to distinguish yourself from the rest and to make a good impression.
Be ready
These are just a few examples of many strategies to use when buying a home. Regardless of which options you want to try it is important to have a plan set up, the world of real estate moves fast. The last thing you want is to miss out on your dream home because you were too slow to get everything together on time.
