March 29, 2023
5 Ways to Make Your Home Offer Stand Out
Buying a house is an exciting process.
Getting to see interiors of random strangers’ homes, talking the real estate lingo and doing all of the stuff you see on HGTV is fun but there is also a serious side to it.
If you have not engaged in residential real estate in 2020, 2021 or 2022 as a buyer or seller, you are in for a rude awakening.
Inventory is the lowest it has ever been in the history of our housing market and buyer competition is at an all time high. These
days, it is an extremely high probability that if you find a house appealing, several other buyers are going through the exact same thought process.
As a buyer, it is important to understand where you stand in each individual market.
Making the right offer from the onset is ideal and would reduce the possibility of losing out on a house that most likely took a long time to find.
Here are a couple of helpful tips that will increase your chances of the seller noticing your offer over the many others the seller may receive.
Skip Pre-Qualification and Use a Pre-Approval
The difference between a mortgage pre qualification and a mortgage pre approval is the difference in stages of the mortgage lending process.
One comes before the other. The information needed from a borrower for a pre qual letter is very basic.
In fact, many lenders can produce a pre qual letter from simply having a conversation.
The next stage from being pre qualified is to be pre approved, which involves running credit and verifying income.
The latter could be achieved before making an offer.
To effectively compete with cash offers, take that extra step. Sellers need assurance that you can secure financing.
A pre qualification letter automatically leaves you at the bottom of the pile, regardless of your offer amount.
Personal Letters Still Works
As a pioneer of the “buyer love letter” back in 2015, I can tell you the benefits first hand.
Most sellers would view their home as a “product” when the home is listed however, it is still their home and a sentimental attachment still exists.
As a buyer, it is necessary to let the seller know that you will take care of their home as well as they have.
Also, mention the functionality of the home and how it will serve you and your family’s needs.
In a multiple offer situation, the top offers usually end up being very close and it is common for the seller to have a hard time picking which buyer to contract with.
Let the seller see you as a human, not just another piece of paper, so a heartfelt note to the seller with seller compliments and a “thank you” for their time to read your letter could help your offer reach the top of the pile.
Unfortunately, the “buyer love letter” has been abused and some listing agents request for a letter to not be included in the offer.
The argument behind agents disallowing letters is the possibility of violating fair housing laws.
Present your letter on the same document as your offer but refrain from mentioning your race, age, nationality, religion, sex, familial status or disability.
Offer More in Earnest
In a due diligence state, earnest money is rarely at risk if the contract fails to make it to closing.
Due diligence is non refundable but shows a buyer’s commitment to the purchase regardless of the defects discovered, low appraisal or any other additional encumbrance to the listing.
Consult with your agent to determine the condition and possible value of the listing before determining a competitive due diligence fee.
If all of the due diligence is performed within the due diligence period and if you aren't comfortable moving forward with the purchase, termination within the due diligence period warrants a full reimbursement of earnest money.
Having said that, earnest money can be as high as you want it to be.
If you want to show the seller that you have the means to purchase but you are depending on the seller to acknowledge the home’s shortcomings during negotiations, it is ok to “flash cash”.
The purpose of earnest money is to show the seriousness of a buyer, make sure the earnest money in your offer shows how serious you really are.
Offer a Short Due Diligence Period
The due diligence period is heavily dependent on your agent’s ability to deploy the necessary parties involved in the discovery of the feasibility of the property.
In most markets with skilled agents and credible networks, the inspection could be ordered quickly.
Making a seller wait is a bad idea. Perform your discovery as soon as possible. It can also help get to the closing table faster.
Ask the Listing Agent “What is Most Important to The Seller”
Sellers all have different circumstances and different needs outside of price and assurance of their home being sold.
If a seller got the amount desired, there may be other ideal terms that the seller may not even think about until that idea is presented.
Having your agent calling the listing agent before making an offer has several benefits.
Although the listing agent has limitations on what information he or she is able to provide, they are allowed to discuss any additional desired terms (i.e. closing date and or move out date).
Seller lease back options have become very popular over recent years because of contingency restrictions.
Also, in that conversation, your agent could gauge seller motivation and the listing agent’s level of skill. You won’t know if you don’t ask.
It is extremely difficult to compete as a buyer in today’s marketplace.
Being realistic and aggressive will get you the house that most likely took some time to find. If you like the house enough to write an offer, don’t hold back any punches. As long as housing demand trumps housing supply, houses won’t lose value.
As you engage in the market, observe the housing conditions, be realistic about where you stand and be willing to compete.
Contact one of our team members today to make sure your offer will get accepted.
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If you follow these steps carefully and correctly, your first home purchase will be a pleasant experience.
Speak to an actual person.
If you have any questions regarding real estate transactions, drop us a line.