Around this time each year, many homeowners decide to wait until after the holidays to sell their houses. Similarly, others who already have their homes on the market remove their listings until the
9 Ways To Get Your Offer Accepted In A Seller's Market
Dated: September 12 2020
You've been searching for homes for a while, and you finally found something perfect for you and your family’s needs. You’re willing to pay the asking price. So, it’s a sure thing, right? Not so fast....
A seller’s market means that there are more buyers than there are homes available for sale. It may mean that your full-price offer just isn’t going to get it done. So, what can you do to get that home you just found? Here, we've outlined several tips that might push your offer to the front of the line.
1. Make Your Offer As Clean As Possible.
A clean offer should not be contingent on the sale of another property or have other financial constraints. Ideally, it should also be free of seller concessions, which are things that a buyer asks for outside of the offer price, such as help with closing costs. Contingencies may be necessary, but if you can avoid them, your offer will be much stronger.
2. Get Fully Pre-Approved from your Lender.
A full “Pre-Approval” means your loan file has already gone through the full underwriting process. In this scenario, you complete the entire loan process with your lender before making an offer on a home. When submitting your offer, the seller will know that the chances of your loan failing are nearly zero.
3. Write A Personal Letter To The Seller.
A simple way to increase your odds of getting your offer accepted is to write a personal letter to the seller. This practice is becoming more common as competition for homes increases.
If a seller has lived in their home for many years, it may put them at ease to know someone who cares is moving in. By including a letter that tells the seller a little bit about yourself, why you love the house, and why you want to make it your home, it may make the difference when competing with other buyers.
4. Offer Above-Asking Price.
This is not the market for making low offers and hoping someone will bite. You will have to make your offer strong enough to beat out others in a multiple-bid situation. If you want the house, you’re likely going to have to go above the asking price.
We’ve seen some buyers who just feel that they won’t or can’t do this. But think about it – the value of a home is determined by what a buyer is willing to pay. Generally, the listing price is an arbitrary number, designed to spark interest and bring buyers to the table. It is common today for homes to sell 5-10% ABOVE asking price, in a strong seller’s market.
Granted, the home will need to appraise, and if the contract price is higher than the appraised value, this requires the 2 parties to re-negotiate the price. More often than not, this will benefit the buyer, as the seller will have to accept the lower appraised value or cancel the contract and start over.
5. Put Down A Larger Earnest Money Deposit (EMD).
Your earnest money deposit is proof that you are a good-faith buyer. In our area, the Title Company holds this deposit and it is credited back to you at closing. In competitive situations, we recommend putting as much down as EMD as you can afford. It can sometimes be the only factor that separates your offer from another.
If you do put more of an EMD down, make sure you intend to buy the home. If you don’t end up moving forward with the purchase, your EMD may be in jeopardy. If you’ve already signed the contract and don’t buy the home, the seller could keep your EMD as compensation for the time wasted.
6. Make A Larger Down Payment.
No matter what type of loan you choose, offering to pay more down is another sign of good faith to your seller. As we’ve indicated with several of the previous points, anytime you can showcase that you’re in a good financial position, you should do so. This situation is no exception to that rule. By putting down a larger down payment than you have to, you send the message that you’re serious about the purchase and capable of meeting all financial obligations.
7. Be Flexible on the Closing Date.
This is an easy one. Sellers are often navigating the timing of where they are moving and when. When presenting your offer, let the sellers know that you are flexible with the date of closing, allowing them to “customize” this date to their liking. If your offer is neck-and-neck with another, and you are flexible here, it could well make the difference.
8. Offer to Buy the Property “as-is”.
While we would never suggest giving up your Inspection Rights, if you need to be competitive with your offer, you can agree in your offer to buy the home without requesting any repairs from the seller. If something major is discovered during inspections, you still have the right to cancel or re-negotiate the price, if needed.
9. Make Sure Your Offer Is Complete.
This one is really for your Real Estate Agent. Paying attention to the details of your offer should be a no-brainer, but every day there are mistakes made in this process. This may include missing disclosures, EMD, or pertinent information for the purchase agreement. In a competitive market, mistakes like these may result in your offer getting tossed.
If a seller receives multiple offers that are complete, they may not give your offer a second look. If you want to make sure you have a chance in the running, make sure to cross your “t’s” and dot your “i’s”.
The Bottom Line
While they may seem small, these things can go a long way to making your offer stand out and get you the home of your dreams. Establishing that you’re a serious buyer, with the financial capabilities to meet all obligations, is the way to a seller’s heart. Be willing to go the extra mile, both in your intention and in your financial offerings. If you do so, the seller of your dream home will notice your effort and give your offer a second glance.
Don’t forget about the details. Make sure you are following all the guidelines to a T. This includes submitting your documents accurately and on time. Take the extra time to follow up with all parties involved to assure your information and payments made it to the appropriate person. Don’t be afraid to come across as over-attentive to detail. Being proactive will serve both you and your future home’s seller well.
Buying or Selling a Home in Today's Market is a complicated process. Mike brings 35+ years of Real Estate experience to the table, as both an investor and a Licensed Broker. In 2020, Mike co-founded....
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