Debra Pauley
Associate Broker
Realty Executives Arizona Territory
How to Get your offer accepted in a competitive Seller’s Market
You have investigated the market, searing day and night online and your finally ready to make a offer on your dream home. You have perfect credit or plan to pay cash, will this guarantee you get the home? Maybe not. 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 may not cut it. So, what can you do to get that perfect house you have diligently searched for? These tips may push your offer to the front of the line.
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. It should also be free of seller concessions, which are things that a buyer asks for outside of the offer price. Concessions can be asking the seller to pay for closing costs, etc. Cash is king. Dealing with cash offers proves that a buyer is serious and has the financial means to expedite closing. Cash offers allow the buyer to be in control instead of letting a lender dictate the closing process. If your obtaining a loan, do not just get loan pre-approval from your lender. Ask your lender to provide underwriting approval prior to actual house hunting. This way your offer will hold great confidence to the Seller that you will be able to complete the sale. Obtaining a lender from out of the area may be an issue for a seller as they may not know the Prescott and Quad Cities properties or there may be delays obtaining an appraiser. As an agent, we have all had issues with out of town or online lenders. Please allow me to introduce you to some reputable lenders who are local and proven to close sales on time, we can reach by phone or stop into their office when needed. You can consider giving up your inspection contingency. If the seller has provided inspection reports from reputable companies, this you can do this with little risk involved. If reports are not available, I would highly recommend completing inspections.
Avoid Asking For Personal Property Not Included In The Contract Love furnishings that the seller has omitted from the listing? Pass. Focus on the offer as these items the seller has omitted may have significant personal value to them and you are just mudding the water. Your offer could be financially similar to another offer that isn’t asking for items that belong to the seller. Asking for these items could weaken your offer and set you back out looking for another home.
Offer Above-Asking Price This is not the market for making lowball offers and hoping someone will bite. You may lose the home and the seller may not counter, just mark the contract with “REJECT.” You will have to make your offer strong enough to beat out a multiple-bid situation. If you want the house, you’re likely going to have to go above the asking price. Sometimes, you only need to offer a few thousands over to make your offer attractive. As your agent, I will run sale comparables to assist you with your sales price. Making an offer above asking price won’t end up costing you much in the long run. What you put down and what you pay monthly on your mortgage will only change significantly if you offer an unrealistic amount above asking. Keeping your offer aligned to the home’s value, while still above the asking price, will help you secure the home you are interested in. With today’s historically low interest rates, you can afford more of a mortgage than you could of last year.
Beef Up Your Earnest Money Deposit (EMD) Your earnest money deposit is proof that you are a good-faith buyer. If your offer is accepted, your EMD will be placed with the title company who is a neutral party, and it will contribute to your down payment and closing cost. On average, EMDs are about 1% – 3% of the purchase price of the home. If you put a larger amount down, it may show that you are a serious buyer and that your intentions are genuine.
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.
Add An Escalation Clause An escalation clause means that your offer will outbid other offers up to a maximum price. This means that you make an offer saying you will pay X price for a home, but if a higher offer comes in, you will increase your offer to for instance $5,000 more than your offer that has been presented to the seller. Even if you offer an escalation clause, the seller may counter all contracts that they are considering.
Find Out What The Seller Needs For A Moving Date And Why They Are Selling It will be very helpful for your agent to find out what are the needs of the seller for re-locating. Selling and buying can be stressful and the seller may need to rent back for a month after closing. This could work with your moving details and make your offer more desirable.
Ready To Put It All Together? Establishing that you are 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 will notice your effort and give your offer a second glance. I specialize in Buyer’s Representation. I work for you, not the seller, at no extra cost. I am paid by the Seller at close of escrow as per the listing contract. Working with the seller’s agent is like hiring the same divorce attorney, no one is really working for you.
Let us work together and get you your dream home. Please call me if I can recommend lenders or other professionals to make your transaction as smooth as possible.
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