5 Ways to Make Your Home Offer Stand Out
February 16, 2024
Buying a home is an exciting process, but it can be challenging in today's real estate market.
With low inventory and high buyer demand, you'll likely face multiple competing offers on homes. Use these tips to make your offer stand out and beat the competition:
Get Pre-Approved for a Mortgage
Being pre-approved goes beyond pre-qualification - it means the lender has already checked your credit, income, and assets.
Pre-approval shows sellers you are a serious buyer who is ready to move forward.
To get pre-approved, you'll need to provide documents like tax returns, pay stubs, and bank statements.
The lender verifies this information before issuing a pre-approval letter stating the loan amount you qualify for.
Having a pre-approval in hand makes your offer much stronger than just being pre-qualified. Sellers want confidence that you can secure financing.
Write a Personal Letter to the Seller
A letter introduces yourself and your family to the sellers on a personal level. Explain why you love their home and how you can envision your family living there.
Thank the sellers for considering your offer. This letter puts a human face to your offer, separating it from competing bids. Sellers often have an emotional connection to their home.
A letter can remind them this isn't just a financial transaction but rather a family's future home.
Avoid mentioning protected class information like race, religion, or disability status. Focus on your family and why the property is special to you.
Offer a Sizable Earnest Money Deposit
A earnest money deposit shows sellers you are serious and committed to purchasing the home. Typically 1-2% of the purchase price is expected.
In a competitive offer, consider going up to 5% or more of the price.
Ask your agent for guidance on earnest money norms in your local market. The deposit should be enough to stand out, without overextending your savings.
Just know that the bigger your upfront earnest money, the more appealing your offer may be to sellers seeking security you'll follow through.
Request a Short Inspection Period
A shorter inspection period of 5-7 days moves the deal along quickly while still giving you time to assess major issues. Avoid asking for the full 15-30 days some contracts initially provide.
Order inspections ASAP so there are no delays. The shorter period also puts pressure on you to act decisively if problems arise or risk losing earnest money if you terminate late.
Sellers favor a fast timeline, so a shorter inspection window shows you are eager to close. Just be sure you can coordinate inspections promptly.
Ask What the Most Important Terms to the Seller
Your agent can call the listing agent to ask what terms or concessions might entice the sellers besides the highest price.
Maybe they want a quick 30-day close or 60-day leaseback to stay after closing.
See if they have a certain closing date in mind to coordinate moving plans. Are they flexible on possessions terms?
The listing agent likely can't disclose much, but may reveal what motivates the sellers.
If you can accommodate the seller's top priorities, your offer may rise to the top even if it's not the highest price. Cater to their needs to give yourself an edge.
Be Ready to Compete
Today's market has more buyers than available homes in many areas. Expect competition and know you may not win every bidding war.
When you find a home you love, put your best foot forward right away. Don't hold back on price or terms just to start negotiating. Go in strong.
Stay realistic about market conditions and recent sales in the neighborhood. If you really want the home, stretch your budget and consider compromises that still work for your family.
With persistence and smart negotiating, you can find your dream home even in a competitive market!
Advice from Tim
As a real estate agent with over 17 years of experience, I've helped hundreds of first-time buyers navigate the process.
My biggest piece of advice? Find an agent you trust to guide you. An expert agent understands your local market and can help you put together a strategic offer at a fair price.
I always tell my clients to get pre-approved before house hunting. This shows sellers you're ready to move forward.
We then view homes together so I can assess which ones truly match your wants and budget.
When we find "the one," I'll draw on my negotiating skills to make sure your offer is compelling.
My goal is ensuring you have all the information you need to make smart decisions in an emotional process.
I'm here to answer your questions, explain paperwork, coordinate inspections, and reduce stress throughout the transaction.
Real estate laws and paperwork can be confusing, but I simplify it all so your focus stays on finding the perfect home.
With my expertise and full-time commitment, I strive to provide an exceptional experience.
My past clients will assure you that having a trusted real estate advisor on your side makes all the difference in purchasing your first home with confidence.
Contact one of our team members today to make sure your offer will get accepted.
How do I know if I'm ready to buy a home?
Consider if you have a stable income, a good credit score, some savings for a down payment and closing costs, and the desire to take on homeownership responsibilities. Are you ready for maintenance and repairs? Homeownership has benefits like building equity, customizing your space, and tax deductions.
How much money do I need to buy a home?
You can buy with as little as 3% down with an FHA loan, or 0% down with a VA or USDA loan. Closing costs are 3-5% of the purchase price. Get preapproved to see your price range. Save for a down payment, closing costs, and emergency fund.
What credit score do I need to qualify for a mortgage?
Most lenders want at least a 620 FICO score for conventional loans or 580 for FHA. The higher your score, the better your interest rate. Pay down debts and correct errors to boost your score before applying.
Should I get prequalified or preapproved?
Prequalification gives you an estimate only. Get preapproved - the lender verifies your income, assets, credit, and issues a letter confirming you're approved for a mortgage amount. Preapproval makes your offer stronger.
Fixed or adjustable rate mortgage: Which is better?
Fixed rates are predictable as your rate stays the same over the loan term. ARMs have lower initial rates but unpredictable rate hikes. First-time buyers generally prefer the stability of a fixed rate.
What first-time homebuyer programs are available?
FHA, USDA, and VA loans allow 100% financing. Down payment assistance programs like grants or second mortgages can help with costs. Many states and cities have buyer programs too.
Should I use a real estate agent or for sale by owner?
Experienced agents guide you through the process, negotiate on your behalf, and ensure paperwork is done properly. FSBOs can save on commission but are risky for first-timers.
How do I make my offer stand out?
Get preapproved, offer over asking price if reasonable, keep contingencies flexible, send a pre-inspection report, waive appraisal gaps, and write a personal letter to the seller.
What happens during closing and when do I get the keys?
You'll review and sign final documents and transfer funds on your closing date. Once the deal records and funds disburse, you get the keys! Expect 1-2 hour closing appointments.
What expenses come with homeownership?
Ongoing costs include your mortgage payment, property taxes, homeowners insurance, HOA fees if applicable, utilities, maintenance, repairs, and improvements over time. Budget accordingly.
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