So you want to buy a house? You’re finding the market flooded with buyers who want the same house? How do you make your offer stand out? How do you write the winning offer?
Here are Five things you can do to help you beat out the other buyers and get the home you have your heart set on!
- Get a Realtor. Hire a licensed Realtor you can trust. A good agent will help you out in a number of ways. First, they will know the market and be experienced in MLS searches, helping you to be the first to see great homes that come available. Secondly, your agent will establish a rapport with listing agents, finding out what is important to the seller so that you can write an offer that will be agreeable to them. You might think it’s just about offering the most money, but when it’s close, a seller may have other concerns, which we’ll discuss later. Thirdly, the agent will manage the transaction so that any problems along the way to close of escrow can be overcome.
- Offer cash. I know, most of us can’t do this, but understand that cash offers are competitive because there’s no risk of funding falling through.
- Get a Pre-qualification Letter. For the rest of us, it’s important to find a reputable lender who can write a pre-qualification letter on your behalf. Your Realtor can recommend someone with experience and a good reputation in the area. This is important in multiple offer situations because the listing agent may advise the seller to avoid pre-qualification letters that are incomplete, unsupported by documentation, or written by sketchy, unrecognized lenders. There is a risk of funding being denied, so the better your pre-qualification letter is, the better your chances of winning the home!
- Make a Good Impression. There are several factors that go into this, most of them dealing with money. First, offer a reasonable dollar amount. Understanding that there will likely be other offers, don’t offer any less than you’re willing to pay, given your Realtor’s professional opinion of the fair market value. Second, make a good earnest deposit. If two offers come in at the same price, but one offers $500 earnest money and the other offers $3000 earnest money, the buyer offering more money has more “skin in the game,” and will be taken more seriously. It shows the seller that you’re not going to walk away from the transaction. The third thing is to offer as much as you can in down payment money. Again, if you’re up against other buyers, showing more money here makes your offer stand out. It signals that you’re financially strong, and more likely to close successfully.
- Be Flexible, Waive Contingencies. Money isn’t the only factor that a seller will consider when comparing offers. Some may need a specific closing date in order to make their selling process less stressful. For example, a home may be listed in April, but the seller may prefer to move late in the summer when they’re transferring to a new job. Your Realtor may be able to glean this and other important information after establishing communications with the other agent. If you can be flexible on the closing date and other factors, your Realtor can write the offer in a way that the seller will appreciate. Secondly, when a contract is written, there will be contingencies in place such as appraisal contingencies and buyer sale contingencies that are there to protect the buyer. Your Realtor and lender together can help you formulate a low-risk plan where you waive some contingencies, thereby making your offer more seller-friendly.
The Bottom Line. When you find yourself as a buyer in a seller’s market, you can be successful. Your best bet is to surround yourself with competent, experienced professionals you can trust. When you understand what the seller is looking for in the sale, you can write the winning offer!