How To Make Your Offer Stand Out
If you have been in the market to buy or sell a home within the past year or so, you know how crazy hot the market has been. Homes are being listed and have multiple offers within hours of hitting the market. This drives up prices and puts buyers in a tough situation.
As a real estate agent, I have seen my fair share of heartbreak when it comes to buyers missing out on homes. So, I wanted to share some tips on how to make your offer stand out if you get put in a multiple offer situation.
When Covid-19 put the world on lock down, people were forced to stay home. That made a lot of people realize they needed more space. As more people were working from home, offices were needed. Families could not leave to go on vacation, so buyers were looking to get a pool or a bigger back yard. These are just a few things buyers were looking for, along with more space.
First things first: get pre-approved by a reputable lender. You want to know going in what your budget is and to have a lender that is going to work hard to make sure you close on time. Once you know what your budget is, you can start looking for homes. My advice however, is to look for homes just under your budget and not at your maximum. Mainly because homes are selling for over asking price and you don't want to fall in love knowing your offer probably won't even be considered at full asking. That's not always the case, especially if the home has been on the market for a while, but that's typically the case in today's market unfortunately. If you have a large down payment, that also is appealing to sellers.
Once you go to make an offer, make it as clean as possible. Meaning don't have a lot of contingencies if you can help it. One thing that might deter a seller is making your offer contingent on your home selling. A seller is most of the time going to go with an offer that does not require a home to be sold in order for theirs to sell.
Also, don't ask the seller to pay for your closing costs and offer to pay for your own home warranty instead of the seller paying for it (if you want one).
Make your earnest money payment higher than usual. Earnest money is a good faith deposit. When a buyer and seller enter into a purchase agreement, the seller takes the home off the market while the transaction moves through the entire process to closing. If the deal falls through, the seller has to relist the home and start all over again, which could result in a big financial hit. So, if you offer more earnest money, that could make your offer look more appealing.
Another thing you can do to make your offer stand out is make your inspection period shorter. That way if you do decide to back out after the home inspection, the seller can get the home back on the market as soon as possible.
Have your real estate agent ask questions. Find out what the seller wants. Maybe your offer has a closing date in 30 days but the seller has lived there for 40 years and needs 60 days to get everything out of the home. See if there's anything else the agent can tell you about what the seller is looking for.
You can also use an escalation clause in your offer. That basically says you are willing to pay up to a certain amount - say $1,000 more - than the highest offer. But you can cap that amount so you don't go over your budget. So, for example, if the home is listed at $150,000 and you're pre-qualified for $175,000, you can say you will pay up to $1,000 above the highest offer as long as that highest offer isn't more than $175,000.
Finally, some agents recommend writing a "love letter" to the seller. That's when the buyer writes a letter to the seller saying why they love the home and would like for the seller to choose their offer. But, that is a tricky thing. You could easily break fair housing laws if you aren't careful. So, if you do write a letter, make sure you are not sending a picture of your family or talking about race or religion or anything like that. Just proceed with caution if you go that route.
If you are in the market to buy, be prepared to go look at any homes you are interested in as soon as possible. More than likely they will be gone the next day. Make sure you are working with an agent that is flexible and can get you into the homes you want to see. Keep in mind, you will have to make quick decisions in this market. If you see a home you want, you typically have to make an offer that day so you don't miss out.
It can be hard being a buyer in today's market. I hope these tips are helpful for you and that you are able to get the home you want if you get into a multiple offer situation.
If you are looking to buy or sell a home, I would love to help! You can call me at 423-963-0091 or email me at firstname.lastname@example.org.