6 Tips for Getting Your Offer Over the Finish Line When the Competition is Fierce
In addition to planning ahead, a little creativity can go a long way when submitting an offer to purchase a new home, especially when inventory remains low amid intense buyer demand. Assuming your offer is competitive financially, here are a few more suggestions that will help you stand out to a seller.
Get Pre-Approved
Cash has always been the gold standard when evaluating competing offers; however, for most buyers, forgoing a mortgage isn’t an option. That’s why getting pre-approved is essential. With their exclusive Proper Approval program*, Proper Rate gives buyers an even bigger leg up by not only pre-qualifying an individual but approving and underwriting the mortgage ahead of time. This can be just as attractive as having cash in hand.
Modify Contingencies
Generally, the fewer the contingencies, the more attractive the offer. And while some buyers may choose to waive certain contingencies, such as the home inspection, it’s important to understand the potential risks involved. Natasha O’Connor, vice president of brokerage services for @properties Christie’s International Real Estate’s Glenview and Northbrook offices, suggests a modified inspection contingency as another option. For example, you might tell the seller you’ll overlook any repair valued at less than $1,000 or specify that you’re only looking for major issues such as mold, radon, or foundation issues. This sends the message that you’re more than willing to be reasonable and not out to nickel and dime the seller.
Be Memorable…
Throwing in perks for the seller in a multiple offer situation has also become increasingly popular. For example, offering to pay certain seller-side transaction fees or closing costs can be a significant incentive. But O’Connor said some buyers are getting even more creative in their endeavors, citing one buyer who wrote into the contract: pizza delivered to the seller every Friday until closing, up to $50 per delivery. “Something as basic as offering to pay for the final deep cleaning of the home prior to closing can also sweeten the deal,” added O’Connor.
…and Flexible
Buyers should be as flexible as possible with the closing date and be prepared to consider a rent-back agreement if requested by the seller. When writing up an offer, one @properties Christie’s International Real Estate agent said she prefers to write in “seller’s choice” under the close date, further demonstrating flexibility.
Increase Earnest Money
Increasing your earnest money deposit is a way of showing the seller that you’re serious about closing and you don’t intend to back out of the transaction.
Escalate Your Edge
In hyper-competitive markets, some buyers are including escalation clauses with their offer. This means you’re willing to raise your offer a designated amount above a higher competing offer, often with a cap. It can be a roll of the dice as the seller can counter your price maximum or raise the asking price entirely, but for properties likely to have multiple offers on the table, this may be something to consider.
Maintaining a level head throughout your home search is always the best advice but employing these tips can make the process less stressful while best leveraging your position in the marketplace. For more tips, reach out to your @properties Christie’s International Real Estate agent.
*Proper Approval (the “Approval”) is contingent upon receipt of executed sales contract, an acceptable appraisal supporting value, valid hazard insurance policy, and a re-review of your financial condition. Proper Rate, LLC reserves the right to revoke this Approval at any time if there is a change in your financial condition or credit history which would impair your ability to repay this obligation and/or if any information contained your application is untrue, incomplete or inaccurate. Receipt of an application does not represent an approval for financing or interest rate guarantee. Not all applicants will be approved for financing. Restrictions may apply, contact Proper Rate, LLC for current rates and for more information.
