15 Strategies to Get Your Offer Accepted
The real estate market is HOT right now in the Twin Cities Area, as it is in many real estate markets throughout the country. Home inventory levels are significantly low. This has resulted in newly-listed homes being sold within days or even hours of going on the market. If homes in your market and/or price range are selling in less than 7 days, there is a very good chance that the newly-listed homes that are are of interest to you are receiving multiple purchase offers. This is excellent news for sellers; on the other hand, competing with multiple offers is not good news for the buyers. It has created a challenging environment for buyers.
In situations where there are multiple competing purchase offers on a home, there are several ways that sellers can deal with and consider them. The listing agent will offer suggestions; however, the sellers, not the listing agent, make the decisions about how offers in a multiple offer situation will be presented, dealt with, and accepted.
Ryan has over ten years of experience winning multiple offers for his buyers. Here are several things that you and Ryan can do to increase the odds of your offer being chosen.
Make your offer the “Best”!
Get Pre-approved, NOT Pre-qualified
In order to win in a multiple offer situation, it is critical that you have a pre-approval letter. A lender will will ASK about a buyer’s income, debts and assets before issuing a pre-qualification letter. The pre-qualification letter can be thought of as a “lender’s prediction”. When a lender has issued a pre-approval letter, he or she has VERIFIED the buyer’s income, debts, and assets. Think of the pre-approval letter as the lenders written verification/commitment. You can also ask the lender to call the listing agent to ease their minds.
Offer More Than the List Price
In multiple offer situations, the sellers usually choose the “Highest and Best” offer. The number of offers they receive will likely determine how high the final selling price goes. One thing to keep in mind is a cash offer may win even when a financed offer is higher.
Include a Higher Earnest Money Deposit
A higher earnest money deposit demonstrates that you are a serious and committed buyer with the intention to close. It also suggests that you possess financial strength as it shows that you have funds readily available that you are willing to tie up while you inspect the property and apply for your loan.
Don’t Ask for Seller – Paid Closing Costs
A buyer will always pay their own closing costs in the end. The question is, how will you pay them – upfront or rolled into the mortgage loan. If they are rolled into the loan/price, one thing you need to consider is potential appraisal issues. Also, if another buyer makes an offer for the same purchase price and does not ask the seller to pay for their closing costs then you are the weaker offer.
Don’t Ask for a Home Warranty
You can certainly purchase a home warranty for yourself; they are relatively inexpensive. Asking the seller to pay for it is just one more “ask”/demand that another buyer/offer may not be asking for.
Don’t Make the Offer Contingent on the Sale of Your Home
We are in the midst of a hot real estate market right now – a “Seller’s Market”. Multiple, competing offers are common. If your offer is contingent on the sale of your home, it comes with uncertainty. That level of uncertainty depends on what “stage” of the listing process your home is in. Has your home been listed? Is it active on the MLS? Is it pending a closing? Unless the sale price of your offer is eye-popping, if a seller has several offers to choose from they are more likely to choose an offer that doesn’t come with this uncertainty.
Be Flexible About the Closing Time
Offer to close quickly for vacant homes. Sellers have concerns such as theft, liability, etc. with a vacant home. If the seller’s home is occupied, offer to close at the seller’s convenience. If the seller needs to find a new home, be flexible and provide them that time. Keep in mind that the time line for the mortgage process can vary based on loan type and other variables; so, be sure to check with your lender prior to making a “shorter-than-the-norm” closing-time promise in your offer.
Be Flexible and Understand the Seller’s Needs
Ryan can find out what terms the seller is looking for prior and you can meet those needs in the offer. Does the seller want a quick close or do they need a longer escrow period until their new home is ready? Do they need a lease back? Offering a shorter inspection contingency period could also help.
Create a Personal Connection with the Seller
Including a letter with your offer adds a personal touch and can have quite an impact. Letting go of a home can be a difficult and emotional process for a seller. A personal letter letting the seller know how much you love their home, that you plan on living in it rather than leasing it, how much you will enjoy it, how you will take care of it, if you will be active in the community, and if you share the same interests or other similarities may be just the advantage you need to overcome another competing buyer. Don’t be afraid to include a few pictures to help “sell your story”.
Add a Deadline to Your Offer
In a “seller’s market”, where newly-listed homes are getting offers within days of being on the market, sellers may think they can “shop the offer”. Don’t give the seller the opportunity to milk it for a better one. Include a firm deadline in your offer, like “Wednesday, May 3, 2017 at 6:00 pm”.
Offer to Pay More Than the Highest Offer
Offer to pay $XXXX above the highest offer; but,no more than $XXXX.
Increase Down Payment or Show Your Assets
Money talks and “cash is king”. Another way to get the seller’s attention when submitting an offer is to increase the amount of your down payment. Consider other options for increasing your down payment such as gifted funds from relatives or consider including asset statements with your offer.
Consider Your Financing Type & Source
In a multiple offer situation, the type of financing that you have chosen/obtained can have an impact on a seller’s decision. There are many financing options available to a home buyer and some have stricter guidelines than a conventional loan. If you can be approved for a conventional loan, choosing this loan program can have an impact on the seller’s decision. Also, consider the lender that you are using. “No Name”, or even the “Big Guys”, may not sit well with the seller and/or the listing agent.
Remove the Inspection Contingency
You can bring an inspector in prior to making an offer or assume any potential issues. This is a risky but highly-leveraged technique that should not be taken lightly.
Alleviate the Seller’s Appraisal Concerns
When determining the value of a home, appraisers compare the home to other similar homes that have sold in the same area; but, who determined the price that those “comparable” homes sold for? The answer – the buyers. A home’s value is what a buyer is willing to pay for it. So, what if the appraisal comes in lower than the purchase price? Agreeing, in your offer, to pay the difference (principal reduction) between the appraised value and the agreed purchase price.
It’s not necessary to use all of these strategies. An experienced REALTOR®, such as Ryan, can help you understand the risks that are involved with each of these strategies and can help you put together a plan that will increase your odds of winning the “bidding war”.
Call or text Ryan now for more information! 612-750-4887
|Ryan Bretzel is a full-time REALTOR® serving: Lake Elmo, Oakdale, Woodbury, Stillwater, and the surrounding Twin Cities area.
Ryan Bretzel | 612-750-4887
|2850 Curve Crest Blvd. Suite 120 Stillwater, MN 55082|
|Ryan@TwinCitiesHomeSearch.com | www.TwinCitiesHomeSearch.com|