Homebuyers are already out in force looking for those special Spring home options!
As one of those buyers, how can you prepare to present the strongest offer possible in potential multiple offer situations?
Lisa Ash with the Homes by Ash Real Estate Team of Keller Williams Realty Integrity Northwest will break it all down for you.
Here are the top 10 things you can do as a buyer in today’s market to ensure you present the strongest possible offer when you find that dream home! In no particular order…
- STRONG EARNEST MONEY – One of the easiest things you can when it comes time to write a strong offer is to present one with a strong earnest money option. Your earnest money should equal at least 1% of the offer, but if you can offer more this shows the seller just how serious you are. If you can’t make it a true 1% or better, another option would be to make the earnest money offer non-refundable. This shows the seller you have some ‘skin in the game’ and are committed to your offer to purchase.
- OFFER A HIGHER PRICE – Offering a higher price on your proposed home purchase agreement is probably the most common way to get on a seller’s good side. However, it’s important to understand if your offer is contingent on lender underwriting and appraisal, and the home doesn’t appraise for the amount you’re offering you will need to come up with the difference out of pocket to keep the offer active. And, if the contract is not written contingent but is still reliant on that appraisal, then you may be on the hook for coming up with the difference on an accepted agreement. It’s important you weigh all options with your REALTOR® or attorney at time of the offer.
- OFFER A FLEXIBLE CLOSING DATE – When the market is so hot, and homes are selling so quickly, it could leave a seller in the potential position of being without a home themselves after they sell their current property. So, giving the seller flexibility on a closing date could be very appealing to a home seller.
- OFFER A FLEXIBLE MOVE DATE – Much like a flexible closing date, a flexible moving date for the seller could be extremely appealing. This means you agree on a closing date, but you may give the sellers extra time to move out of the property after closing. There are special considerations that come along with this concession and your REALTOR® or real estate attorney could walk you through these, but one of those may be insurance liabilities and responsibilities or rent-back considerations for compensation.
- REMOVE INSPECTION CONTINGENCIES – Inspection contingencies are one of those things that make sellers nervous in hot market because the timing of everything could put a seller in a potential situation of lost time or missed opportunities. We’re not suggesting a buyer should skip an inspection, but we are saying that in some cases making an offer non-contingent of the outcome of that inspection will be more appealing to a seller in a hot market. Again, this is where you would lean on the expertise of your REALTOR® to best advise you.
- REQUEST FEW OR NO CONTINGENCIES – Along with inspection contingencies there are other contingencies that could hold up a sale. One of them was mentioned a bit earlier in this article… financial contingencies are one of the most common of these. If you’ve been pre-approved or work with a lender who can even provide a credit underwritten loan approval, then there’s less of a reason to have a contingent offer based on financing.
- INCLUDE LOW OR NO SELLER PAID CLOSING COSTS – During a buyer’s market and when interest rates were higher, it was a common practice to ask the home seller to help with closing costs. But, when you have a hot market where multiple buyer offers is more the norm than the exception, and when interest rates remain low, sellers are less likely to entertain offers that include this concession request. Avoiding this ask will help strengthen your offer to purchase but will not stand alone in multiple offers. You will still want to consider shoring up your offer price, closing flexibility, and/or earnest money offer.
- SHARE YOUR STORY WITH THE SELLER – It’s not always possible to get in front of the seller to convey your interest in their home, so writing a “love letter” to the seller to present with your offer could go a long way in making a connection and conveying your eagerness and drive to purchase their home; which they most likely had a strong connection with.
- WORK WITH A STRONG LENDER ADVOCATE – A strong lender advocate could speak to the seller or seller’s agent on your behalf to reinforce your buying power and your story. This type of outreach can go a long way in making the seller feel more secure about your offer and your ability to buy.
- ADDRESS SPECIAL APPRAISAL CONCERNS – With many government-backed mortgages; FHA or VA loans, will require an appraisal inspection as part of the mortgage approval and final underwriting. Although it’s perfectly kosher to ask a seller to pay for costs toward required work orders or re-inspection fees, many sellers can be turned off by this request in a hot market. With that said, there are some mortgage products that will not allow buyers to pick up the fees, so it’s important you talk with your REALTOR® and your lender about your specific situation and the best way to approach this with your offer to buy.
BONUS TIP: HIRE A STRONG REALTOR® ADVOCATE – One of the BEST things you can do to help yourself is to hire a successful and expert professional REALTOR® who knows your market and knows how to power negotiate a strong buyer’s offer. Someone who will reach out to the seller’s agent on your behalf and have those candid conversations or allows you to present your offer in person. When you can advocate for your offer in person, there’s more opportunity to convey your story and make a connection with the other party to the transaction.
There are a VAST number of strategies you can leverage to help create a strong offer and overcome multiple-offer challenges.
Knowing where to start does take a special expertise that only someone with award-winning buyer solutions and sales achievements.
When you’re ready to put your dream of buying a home into action… you need to call Team Homes by Ash!
Homes By Ash
Lisa Ash, REALTOR®
Keller Williams Realty Integrity NW
MN License #: 20355856