Sometimes you have to get creative to stand out in today’s market.
Getting your offer accepted isn’t always about coming in with the highest offer. It’s more important to anticipate what, exactly, the seller’s goals are and creating the offer that solves all of their problems. With that considered, here are a few things that’ll increase your chances of a successful offer.
Hire an agent with connections
A large part of getting an offer accepted is the communication between your real estate agent and the seller’s real estate agent. Your agent should be asking the seller’s real estate agent about their client’s needs and motivations. Do they need time to search for a new home, or possibly rent the property back after closing? Are they motivated by price only? Knowing those needs and submitting an offer that meets them is vital.
Get in early
Staying in touch with your real estate agent pays off big. Sometimes, agents will hear directly from other agents about a home that’s about to get listed — or that won’t enter the MLS at all (this is typically called a “pocket listing”). Regardless of how your real estate agent finds the home that fits your needs, be the first to book a showing and get ready to make an offer on the spot.
Be prepared to go over asking
In a seller’s market, it’s rare to find a bargain. While there are scenarios where you may end up successfully offering under the asking price, expect to offer a little more for the home you really love, or at least the full asking price in today’s market.
Offer 10% earnest money
Typically in our market, we suggest offering $10,000 as your first deposit. The second deposit should combine with the first to equal 10% of the purchase price of the property. This, of course, is not written in stone but does help to present a strong offer.
Write a letter to the sellers
Hey, we said these are “creative tips!” Enclose a handwritten letter to the owners thanking them for their time in considering your offer. But don’t stop at a simple thank-you. This letter is about building a personal connection that normally isn’t made when sellers just look at a bunch of numbers. Expand on why you love the home and what caught your eye. Above all, be honest and genuine.
If you’re open to the seller choosing the closing date, you may just get an edge over other offers, especially if the home just went on the market. Depending on the seller’s situation, the idea of having extra time may be worth more than the extra money another buyer is offering.
Nix the financing contingency
We know this is not always possible. But, cash offers are more attractive to sellers as having one less risk of the deal falling through. When possible, we suggest removing the financing contingency to sweeten the deal. This doesn’t mean you can’t get a mortgage! It just means the transaction is not contingent upon you securing the mortgage. I’m happy to explain this in more detail over the phone.
Have pre-approval, not pre-qual
If you do have a financing contingency, make sure you have a pre-approval, not just a pre-qualification. Pre-qualification means that a mortgage company has really just taken a glance at your financials to give you a rough estimate on what the amount and interest rate would be. In a seller’s eyes, this means that a lot of things could sink the transaction.
Instead, get a pre-approval. This is a more rigorous process that will look at your credit report, verify pay stubs, bank statements, and other financial documents. If you pass their underwriting requirements, the lender will give you the actual numbers for the loan (and then provide you with a letter to provide as proof).
Consider an escalation clause
An escalation clause in your offer means you’ll increase your offer to a certain price if another offer comes in. (It’s similar to how, in an online auction, you can set a price limit, and bids will be entered automatically until that point.) This can be a risky thing — the seller may just counteroffer your price maximum or raise the asking price entirely. But, for properties that have multiple offers on the table, this may be something to consider.