Making an offer on a house isn’t just about telling the seller how much you’re willing to pay. You’ll prove that you’re able to pay the offer price, set the earnest money amount, the closing date, contingency timelines, and what you expect of the seller leading up to closing. This is also time to pull out all the tricks we’ve got to sweeten the deal and connect with the seller.
Compassion and understanding can go a long way when it comes to having your offer accepted. It lets a seller know you’re willing to work with them and their unique needs.
Standing out
Low inventory makes competition fierce. It’s a constant conversation for many homebuyers, especially those that are house hunting for the first time. The highest price offer is not always the one that wins. Being flexible with the seller is an essential part of making your offer stand out. The first thing I will do when you tell me that you’re ready to place an offer is call the listing agent. I have usually already spoken to them and at this point I’m just catching them up. My goal is to get the most information I can about the seller and their needs. Is the seller moving out of state? Would a quick closing be easiest? Maybe the seller is buying a home at the same time and could actually use a longer closing so that they don’t need to move twice. What if an elderly seller needs to stay in the house for a week after closing so that her kids can help her move? If you can meet the seller’s needs, you’re going to be ahead of the game. Expressing your desire to work with the seller and listing agent can sometimes be what makes the deal come together.
Moving Quickly
Because inventory is low, you’ll likely be up against other buyers when putting in an offer. Submitting your offer as soon as you’re sure you love it is a must. Even if you move quickly, there is a chance that you’ll find yourself in a multiple offer situation and maybe even outbid by another buyer. Keep in mind that you may lose out on an offer of two, but eventually your offer will be the winner. Don’t get discouraged and don’t shy away from making an offer because you don’t think you have a chance. Just remember that it doesn’t cost a thing to make the offer.
Escalation Clauses
In a multiple offer situation, you may consider adding an escalation addendum to your offer. This allows the seller to increase your offer by a specific amount over a competing offer. For example, you may offer $350,000 on a home that you love. You are willing to go as high as $370,000, but don’t want to offer that amount right away since you don’t know what the other offers look like. You can add an escalation clause to say that you’re willing to pay $1,000 over any competing offer but will not exceed $370,000. If an offer came in at $360,000, the seller would be able to bump your offer up to $361,000.
Contingent Offers
If you already own a home that needs to be sold before closing on your new one, you may have to make an offer contingent on the sale of your current house. In a sellers market a contingency like this can be a huge sticking point in having your offer accepted since there are many buyers that may not have the same constraints. Your best bet is to get your home on the market before you start the search for your next house. Once your current house is under contract, you’ll be able to show the seller of your new home that you’ve already found a buyer, you simply need the closing to take place after the sale is completed. These sales can even happen on the same day if planning is done correctly.
