You’re finally ready to take the plunge and put in an offer on your dream house. You found something that is perfect for you and your family’s needs, and you’re willing to pay the asking price. It’s a sure thing, right? Not so fast. A seller’s market means that there are more buyers than there are homes available for sale. It may mean that your full-price offer just isn’t going to cut it. So what can you do to get that perfect house you’ve searched high and low for? These tips might just push your offer to the front of the line.
1. Make your offer as clean as possible. That means your offer should not be contingent on the sale of another property or have other financial constraints. It should also be free of seller concessions, which are things that a buyer asks for outside of the offer price, such as help with closing costs.
2. Don’t ask for personal property. Drooling over the sparkly chandelier listed in the exclusions? Don’t ask for it. Want them to throw in that cool lawn furniture? Maybe you’d better skip it. Your offer could be very similar in price to another that isn’t asking for items that belong to the seller. It could weaken your offer to ask to throw in those extras.
3. Consider waiving inspection or shortening the contingency period. This means that if you are unable to find a mortgage, you can’t ask for your earnest money deposit (EMD) back. If you shorten or waive the inspection period, it shows the seller that you mean business and really want the house!
4. Offer above-asking. This is not the market for making low offers and hoping someone will bite. You will have to make your offer strong enough to beat out a multiple-bid situation. If you really want the house, you’re likely going to have to go above the asking price.
5. Put down a stronger EMD. Your EMD is your proof to the seller that you are good-faith buyer. A larger EMD than is traditionally offered (about 1%-3%) shows that you are a serious buyer and that you fully intend to purchase the property.
6. Waive the appraisal contingency. This is a huge one in neighborhoods that are experiencing a resurgence in property values or interest. An offer to bring the money to the table if the home doesn’t appraise will definitely set your offer apart from the others. Just make sure you are in a strong financial position to take this risk!
7. Make a larger down payment than is required in your loan program. No matter what type of loan you choose, offering more than is required is another sign of good faith to your seller.
8. Add an escalation clause to your offer. An escalation clause means that your offer will outbid other offers up to a maximum price. This means that you make an offer saying you will pay X price for a home, but if a higher offer is received, you will increase your offer to Y price.
9. Make sure your offer is complete! This should be a no-brainer, but offers are received every day that are missing disclosures, EMD or pertinent information for the purchase agreement. In a competitive market, this could get your offer tossed.
10. Offer one month of free occupancy. When purchasing a home with a mortgage, your payment doesn’t actually come due until a month after you close. Why not offer it up to your seller to sweeten the deal? A seller could very well need that occupancy and offering to pay their “rent” for a month could strengthen your offer.
While they may seem small, these things can go a long way to making your offer stand out and get you the home of your dreams. Happy bidding!