You’re finally ready to take the plunge and put in an offer on your dream house. You found something that is perfect for you and your family’s needs and you’re willing to pay the asking price. It’s a sure thing, right? Not so fast.
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 just isn’t going to cut it. So, what can you do to get that perfect house you’ve searched for high and low? These tips might push your offer to the front of the line.
Get Prequalified and Take Advantage of our Buyer Protection Guarantee Program
Our Stanford Mortgage Buyer Protection Guarantee allows you to submit your offer without a “Loan Contingency.” This will improve your offer in a very competitive market, increasing the likelihood your offer will be accepted in a multiple offer situation.
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, such as help with closing costs.
Traditional contingencies are like a deck of cards you hold to your chest for protection: loan, appraisal, inspection are the main ones. As you lay them on the table, you give them up, which makes your offer more appealing to a seller because you have less opportunity to back out of a contract that you write.”
Even if you don’t add contingencies to your offer, we can still protect your interests. For example, we can get our loan fully underwritten. This means that you will complete the entire loan process with our lender before making an offer on a home. Then when you put an offer in you can confidently leave out a loan contingency with little to no risk.
We never recommend giving up your inspection contingency. It is critical you know and understand the true condition of any home you are purchasing.
Avoid Asking For Personal Property
Drooling over the sparkly chandelier listed in the exclusions? Don’t ask for it. Want them to throw in that cool lawn furniture? Skip it. Your offer could be very similar in price to another offer that isn’t asking for items that belong to the seller. Asking for excluded items could weaken your offer.
If you want a chandelier or lawn furniture, we can go to Home Depot. If you want to seriously compete for and win the bid on this house, it is important for us to remain focused in achieving your goal: buying the house, and hope your competition falls in love with the chandelier.
Write A Personal Letter To The Seller
A simple way to increase your odds of getting your offer accepted is to write a personal letter to the seller. While some sellers only care about the price, others are emotionally attached to their homes and want to make sure it will be in good hands.
If a seller has lived in their home for many years, it may put them at ease to know someone who cares is moving in. By including a letter that tells them a little bit about yourself, why you love the house, and why you want to make it your home, you can make the difference in close bidding situations”
This is not the market for making low offers and hoping someone will bite. We 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.
Don’t allow the thought of offering over the asking price overwhelm you. Sometimes, you only need to offer $2,000 – $3,000 more to achieve the effect you’re going for. Doing this will show the seller that you’re serious about buying the home, and that you want them to consider you as a potential buyer.
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’re interested in.
Put Down A Stronger Earnest Money Deposit (EMD)
Your earnest money deposit is proof that you are a good-faith buyer. Usually, your EMD will be deposited into escrow and will contribute to your down payment and closing costs, on average, EMDs are about 1% 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.
But, if you do put more of an EMD down, make sure you intend to buy the home. If you don’t end up moving forward with the purchase, your EMD may be in jeopardy. We have clauses in the contract to protect your rights should their be a problem with inspections or an appraisal. However if you just change your mind your EMO may be forfeited to the seller. I’ll be your guide through this process.
Waive The Appraisal Contingency
An appraisal contingency can be given up as well – but, this poses the most risk unless you have enough cash to cover any potential shortfall between offered price and appraised price.
This is a huge one in neighborhoods that are experiencing a resurgence in property values or gained interest. An offer indicating your intention to bring money to the table if the home doesn’t appraise will definitely set you apart from the others. Just make sure you are in a strong financial position to take this risk.
Make A Larger Down Payment In Your Loan Program
No matter what type of loan you choose, offering to pay more down is another sign of good faith to your seller. As I’ve indicated with several of the previous points, anytime you can showcase that you’re in a good financial position, you should do so. This situation is no exception to that rule. By putting down a larger down payment than you have to, you send the message that you’re serious about the purchase and capable of meeting all financial obligations.
Pay With Cash
Cash offers also have the important effect of keeping the deal primarily between the buyer and seller and they can call the shots. A financed deal is usually subject to financing and/or appraisal contingencies, which leaves a back door for the buyer to exit. Sellers love cash offers.
Make Sure Your Offer Is Complete
Paying attention to the details of your offer should be a no-brainer, but every day weak agents make mistakes in this process. This may include missing disclosures, EMD, or pertinent information for the purchase agreement. In a competitive market, mistakes like these may result in your offer getting tossed. If a seller receives multiple offers that are complete, they may not give your offer a second look. I’ll make sure this does not happen to you!
Offer One Month of Free Occupancy
When purchasing a home with a mortgage, your payment isn’t due until a month after you close. Why not offer the seller extra time to move to sweeten the deal? But, if you do decide to offer one month of free occupancy, make sure we discuss all of the details beforehand. We need to have this agreement in writing so guidelines are clear and concise. You don’t want to find yourself an unwelcome house guest for an indefinite amount of time.
The Bottom Line
While they may seem small, these things can go a long way to making your offer stand out and get you the home of your dreams. Establishing that you’re 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 home will notice your effort and give your offer a second glance.
I’m here to discuss and walk you through all these details. I always take the time to make sure your offer is prepared properly and submitted timely. If you are thinking of buying a new home or investment property, just give me a call. I’m always available for you.