On Real Estate & More – June 2021

As real estate inventory has declined and buyer demand increased, multiple offers have become common—we are in a seller’s market. This means there are more buyers than homes available for sale. As a buyer, it can be harder to get your offer accepted, even if you write a full price offer. So, what can you do to get the house you’ve been searching for? These tips might push your offer to the front!

Make Your Offer as Clean as Possible—A clean offer should not be contingent on the sale of another property or have other financial constraints.

Waive the Appraisal or Inspection Contingency—An offer indicating your intention to bring money to the table if the home doesn’t appraise will definitely set you apart from the others. Just make sure you are in a strong financial position to take this risk as you would need enough cash to cover any potential shortfall between offered price and appraised price. Likewise, some buyers will offer to waive the inspection process. This method is a risky move but it’s also highly effective. Take some time to consider if this aggressive tactic may be something you should try.

Make A Larger Down Payment—No matter what type of loan you choose, offering to put more down is another sign of good faith to the seller. When putting down a larger down payment than you have to, you send the message that you’re serious about the purchase and capable of meeting all financial obligations.

Add an Escalation Clause—An escalation clause is a provision added to a contract stating that the buyer will escalate their offer above the highest sales price submitted. The buyer’s contract price is automatically escalated without the need to resubmit a new contract or amend an existing one. This clause usually has a maximum escalation amount. When a bidding war takes place, this tactic keeps your offer at the top of the list.

Pay with Cash—For sellers, an all-cash offer equates to a higher likelihood of sales success. With no lender, there’s no financing contingency, which means the odds of a buyer falling out of the deal due to financial issues is significantly reduced. That security can even compel sellers to accept a lower price from a cash buyer over a higher price from a buyer with a loan.

Closing on a real estate purchase is much simpler when you’re not applying for a loan. You don’t have to wait for an appraisal, which can delay your closing. Also, if the appraised value comes back below the agreed-upon selling price, that can re-open negotiations and cost you even more time. Having an all-cash offer will expedite the closing process.

Get Pre-Approved with a Reputable Lender—Preapproval requires submitting bank statements, tax returns, and paycheck stubs. It means more work, but it’s far more powerful to have that than a simple pre-qualification. Additionally, if you are working with a local lender who has a good reputation, the listing agent and sellers will tend to look at that more favorably than an out of area lender who has no accountability to processing the loan in a timely manner.

Find Out What’s Important to the Sellers—Yes, price is important and most sellers want to get the highest one possible. However, buyers often lose out on offers that are at the same price as theirs because of other terms. Have your agent explore what is important to the sellers. What timing are they looking for? Do they need to rent back the home temporarily after escrow closes?

Work with a Local, Reputable Agent—If you find that your agent is poor at following up and following through, other agents may share your opinion. Realtors like to work with other agents they know are experienced and capable. It doesn’t mean you’ll get your offer accepted automatically, but everything helps!

Keep Trying—Just because you lost out on one house doesn’t mean you won’t find what you’re looking for. Keep looking and you will find your home.