Author: Ryan Ginther
Owner/Agent & Loan Officer NMLS #1147279
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(in a competitive market)
8 Powerful Tips to Win Offers
The market is crazy HOT and buying a home right now usually means going toe-to-toe with other buyers and their offers. You would be surprised what a little communication and creativity could produce! Below are 8 powerful ways to get offers accepted without giving up the farm!
While on the subject of saving money, check out the 20 Home Buying Tips that could Save You Thousands page. We highly recommend going there next!
(*all tips are situational & not recommended in all situations)
Ask about the Seller's Motivations
When are they hoping to close?
Do they want a flexible closing date?
Are they trying to avoid repairs?
Is having an extra day or 2 to move out important?
Will providing additional earnest money help?
When are they making a decision and planning on accepting an offer?
Simple communication between a buying and listing agent can expose exactly what the sellers are looking for in potential buyers. There are many variables when narrowing down the winning offer. The questions below should always be asked and considered before monetary options.
Tell the sellers about yourself and turn their financial decision into now an emotional decision. Most sellers want to know who you are. Adding a personal touch can often put you at the top of the offers and greatly decrease your chances of getting "ghosted" without receiving a counteroffer since there is now a humanitarian aspect.
Start with a short bio about your and/or family
Compliment their home and why you LOVE it
Add why it is the perfect fit and your vision in the home
Kindly ask them to consider your offer
Attach a picture of yourself (up to you)
Keep the Offer Clean
The fewer moving parts, the better unless it benefits the sellers. Asking them to leave things behind, paying closing costs, adding in-home warranties, and anything else that isn't quick, easy, and to the point can detour some sellers and some listing agents do not have the skill set to sift and sort numbers to present the bottom line to their sellers.
Avoid asking for too much (leaving furniture, mower, etc.)
Avoid Home Warranties (would still add one post-closing)
Avoid seller paid closing costs if possible
Avoid contingencies (if possible, more next...)
Contingencies hold risks that give buyers an out, so sellers are left to wonder until they meet each milestone. The more contingencies there are, the more they have to worry about. Sales contingencies are the #1 biggest deal killer there is. We know that not all sellers qualify to hold 2 mortgage payments and when that is the scenario, we have ways to help.
If you have to stay contingent, we recommend having your home ready to hit the market with a high-end website to show off to the sellers, proving that you will sell it fast. Check out our "Ultimate Guide to Selling Your Home" for more info
If you do qualify for 2 payments, you can always "recast" your loan later, applying your current home's equity to your new home. We have yet had a scenario where the homeowner pays for 2 mortgages, but it does carry a slight risk
Waive the Appraisal Contingency
Waiving the appraisal means that you are waiving the right to negotiate or back out if the home does not appraise at or above the purchase price. This is very typical on cash purchases but can also be used when a loan is involved. It does require the buyer to come up with the difference in cash at closing, though! This is not for all buyers, and I always suggest setting some limitations.
Set limits, such as "We agree to pay up to $5,000 over the appraised value if necessary"
Only flex this option if there is plenty of money left for savings
Sometimes appraisers have trouble finding comps and appraise the home lower than what multiple people were willing to pay for it.
This gives a seller more confidence that if they were to have a "bad appraisal, they are still protected
Not all loan types allow you to pay extra above the appraised value (FHA is the most popular)
Add an Escalation Clause (Missouri Only)
An escalation clause is a great tool to better your chances of being the "highest and best" offer while making sure you don't go way over the next guy's offer. The idea is to offer a strong base price still and then say you will pay over an amount of the next highest offer, with proof, of course.
Set a minimum offer price with a clause saying you will go up to a certain amount and beat out any other offer by, say, $500-$2,000 (with proof of higher offers)
Offering less but saying upfront that you will pay $(x) over another offer prevents you from paying too much but still assuring a good shot at the highest offer
Make sure the pre-approval letter matches the max offer.
Accept the Home "As-Is"
This isn't as scary as it sounds. You still have an "out" when it comes to buying a home as-is. Inspections are still performed, and you have the ability to back out completely with no penalty. In good faith, it does say the seller intends to make no repairs, but it doesn't mean you couldn't essentially say, "fix this, or we are out."
Offer to waive the right to negotiate any items found during the inspection period
Waive the right, but have them commit to treating for termites if evidence is found
***ALWAYS still retains the right to back out if major items are found
Offer a Rent-Back Option
This option can be a little sketchy as you will have short-term renters occupying your new home. A Rent-Back Option is used as a negotiation tool when the sellers of your desired property have not found a home yet, or they need a flexible timeline. A short-term lease is signed that often includes a daily rental agreement and a commitment from the new renters to upkeep the property and continue to keep the utilities on. This is not ideal if you have to sell a home unless you have a place to stay in the interim.
We recommend seeking legal advice for lease options
Make sure that your lender will allow this. Some require you to occupy the property immediately or within a specific timeframe
Do not "rent-back" more than 1-2 months
Renters are still liable for damages and utility costs
Daily rent is typically the buyer's mortgage payment divided by 30 days
Where do You Want to Go Next?
First Time Home Owner
Buying a home can be a confusing time, especially if it's your first! With all of the moving parts, you can avoid asking questions after it is too late! Check out the most common questions new buyers have before and during the process.
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The market is crazy HOT and buying a home right now usually means going toe to toe with other buyers. Discover 7 Powerful ways to get offers accepted over the other guys!
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