With at least 40% less homes on the market currently than there were a year ago, serious buyers have probably experienced the disappointment of losing a home they wanted to buy from increased competition. Today’s buyers are looking for ways to improve their odds of being the best contract without having to use the purchase price as their only tool.
Buyers should reconsider, rethink, and re-evaluate their “must have” features and amenities. It is probably unrealistic in a normal market to think you can have the perfect home at the price you want but in today’s market it is less possible. List the things you must have and the things you would like to have and prioritize them. Try to identify the critical from the convenient.
The next step is to put together your “home” team. You are the captain of this process, but it is essential to have a strong first officer and that is your real estate agent. This professional will oversee the process, advise you on current market conditions and normal procedures. Your agent will even help you assemble the rest of the team like mortgage officer, title, insurance, warranty, inspectors and can recommend service providers.
Your agent can advocate your cause personally to the listing agent by personally delivering the offer and expounding on your strong points to lobby your position. Obviously, your agent will not share anything that you do not expressly give them permission to.
Even before you write the offer, your agent can inquire with the listing agent about any preferences of the seller not mentioned in the listing agreement as well as to use the proper contract forms and addendums.
The following list of suggestions are provided for your consideration realizing that some may not be appropriate for your individual financial situation or comfort level.
- Get pre-approved from a local lender and include documentation with offer to purchase.
- Have lender phone and email listing agent to expound on pre-approval.
- Increase the amount of earnest money.
- Acknowledge flexibility on closing and occupancy dates.
- Eliminate unnecessary contingencies.
- Waive the appraisal and have proof of funds to meet the difference in the purchase price.
- Avoid concessions like asking the seller to pay the buyer’s closing costs or points.
- Avoid including personal property to go with the sale unless specified in listing agreement.
- Purchase “as is” with right of quick inspection to cancel contract if condition is unacceptable.
- Shorten time frames on necessary contingencies.
- Attach proof of funds for down payment or full purchase price if cash.
- Arrange bridge financing to be able to pay cash.
- Buyer should pay their own normal closing costs.
- Write a personal note to the seller explaining why you like and want their home. Some listing agents are advising sellers to not accept them due to potential discrimination liability.
- Escalation clause … offer to pay $X,000 more than highest acceptable offer up to a limit.
- If you physically sign the offer, use a contrasting color ink to add a personal touch. If using a digital contract, change the font and color to distinguish the signature.
- Make your best offer first because they may not make a counteroffer.
When a new listing hits the market, it is commonplace for there to be a rush of interested buyers that result in multiple offers. It is prudent for you to research and consider which of these ideas you can implement before you find the home; it is much better to have more time to make these decisions, especially, if it involves a mortgage officer or an attorney.
Your real estate professional will be able to tell you if these suggestions are viable and may be able to offer additional recommendations. If you do not have an agent, contact me at (612) 532-4273 or pam.howardto discuss a plan to craft your offer in the most favorable way possible.