In today’s market, it’s not uncommon to be in competition with several other buyers for your dream home.
Matter of fact, one of our recent buyers submitted an offer on a home listed at $227,900 recently and came in with a great offer with a conventional loan putting down nearly 40% in cash and asked for no closing cost assistance, no home warranty and this is the response we received when the offer was rejected.
“This part of the job is hard. The sellers chose to go with another offer. We had 18 offers, 8 of them $10,000 over asking, 7 asked for no repairs, 6 had no appraisal contingency at all and 2 were cash. It was a very tough decision.
I’m sorry for your buyers...”
When you find that perfect house, with the chic chandelier and the doggy door for Fido, the last thing you want to do is lose it because your offer didn’t stand out to the seller, Taking the time to put forth a well-written offer can work wonders for a buyer. Each seller and agent may have different opinions on what makes the best offer, but here are some that we’ve found are the most consistent:
1. Include a pre-approval.
If you want to show the seller that you’re serious about buying a home, get pre-approved before you ever sign an offer. Not only does it show that you didn’t just waltz up, see the for sale sign and throw something out there, but it also alleviates some of the seller’s worries that you’ll back out when the bank finds out your credit isn’t actually as good as you thought it was. Be sure to include that pre-approval letter from the bank with the signed offer. We actually have a few lenders that will go through the underwriting process as much as possible on the front end to give you a better pre qualification status to present to the seller. These types of approvals are the second best thing to a cash offer.
2. Make a decent earnest money deposit.
When you’re sure you can’t picture yourself without this house, be ready to boost your earnest money deposit. Earnest money shows the seller that you’re putting your money where your mouth is, and you’re prepared to give up that chunk of cash if you back of the contract for any reason other than those allowed under the contract terms. There is usually a typical amount offered for your area, so if you really want to look good, go above and beyond that amount. Many sellers are requesting at minimum 1% of the purchase price for the earnest money deposit. Remember in the state of SC that if you are released from the contract for any reason within the agreed upon contract that both the seller and buyer must sign the release to determine who the earnest money should be released to.
3. Remove all the contingencies you can.
Having two mortgages while trying to sell the home you’re in now isn’t really a dream that anyone has, but if you have the cash to do it, it’s definitely going to make your offer more desirable. Anytime you can waive contingencies in the contract, like the sale of your current home, it gives the seller more confidence that the deal will go through without a hitch. Another option would be to shorten the typical time periods. If it’s customary for your inspection period to be 15 days, shorten it to 10 to let the seller know you’re looking to make this happen quickly. In this market as you can see from the scenario above, buyers are waiving appraisals and waiving repairs.
4. Make it Your Best
When you’re up against multiple offers, don’t waste a lot of time expecting to negotiate. Base your offer on solid research of surrounding comparables and really offer what you’d be willing to pay. If you don’t, your offer may be tossed aside for others that did. This includes more than the price, too. Maybe pay out of pocket for some of those extras, like a home warranty or closing costs, instead of asking the seller to contribute. We have even seen in this market where the buyer offers to pay some of the closing costs for the seller. We always like to ask our buyers if they would have any regrets with the offer that they are putting forward. Sometimes that question alone will help you get to the very best offer you can submit.
5. Stay Prepared
It’s time to let the seller know you are serious, so see the house and quickly get in your offer. Having an agent that has everything researched for you up front and that can give you great advice allows you to get your offer in quickly. Don’t hesitate to go out of the box to make your offer standout to the seller by being very thorough, neat and complete. It may end up getting you your dream home. However, stay prepared and don’t stop your dream search even while you have an offer pending. Keep working and be prepared to submit multiple offers to get your dream home. We love to tell our buyer clients to do their best to not get too emotionally tied to a house until they can call it their home! With the right team on your side, winning a contract is inevitable as long as you are prepared and willing to do what it takes to get into your dream home.
Give us a call at 864.881.9191 or visit us online at www.GreenvilleDreamTeam.com.
