How to Get Your Offer Accepted In a Sellers’ Market
You have located the home of your dreams and you are ready to put in an offer.
Since you are willing to submit a full price offer, you figure you can start packing.
Not so fast! This is a sellers’ market, one of those crazy times in real estate when
there are more buyers than there are houses for sale. A full price offer may not be
enough to secure the property. Applying these buying tips for a hot market may help
you get your offer chosen over the competition’s.
Tip #1: Make Your Offer Above the Asking Price
You have got to start with a strong offer. Do your homework on the home’s value.
You can’t go too far beyond its value and expect you loan to match your bank’s
appraisal value. That said; don’t be afraid to offer a few thousand dollars over listing
price. You don’t need to go overboard with your offer to get the seller’s attention to
prove to them that you are a serious buyer making a serious offer. An extra couple of
thousand dollars will make very little difference in the amount of your monthly
mortgage payment when you factor it over the life of your loan.
Tip #2: Don’t Ask for Personal Items
If a beautiful entry hall light, or special seating and a big screen TV in a dream
garage would be nice to have included with the home, don’t make them part of your
offer. This is especially true if that particular item is listed as an exclusion. Which
would you rather have: the home or the item? A competing offer could be very close
to yours without asking for the personal item. Guess who wins the home in that
Tip #3: Add an Escalation Clause
Simply put, an escalation clause says that your offer will outbid any other offer up to
a certain amount. You agree to a certain purchase price but if a higher offer comes
in, you will increase your offer up to a predetermined limit in an effort to outbid the
competition’s. An escalation clause can be risky, so it is important to get legal
assistance when crafting this type of offer.
Tip #4: Cash Is King
If you have the wherewithal to pay cash, the odds may be in your favor. The seller
doesn’t have to worry about any closing delays or that the deal may fall through at
the last minute due to financing issues. The buyer and the seller remain in control of
the deal when there is no financial institution involved.
Tip #5: Waive the Appraisal Contingency
An appraisal contingency says that if the home doesn’t appraise at or above the
purchase price, the buyer has the right to renegotiate the sale price or walk away
from the deal entirely without giving up their earnest money deposit. In a hot
sellers’ market, homes commonly sell for more than their appraised value. By not
having an appraisal contingency, your offer may beat out other similar offers that do
Tip #6: Move Quickly But Offer a Leaseback Option
When you spot that winner, pull the trigger. Be ready to buy, homes do not last long
in a sellers’ market. With the help of a good real estate agent, you can be ready to
make that offer, possibly on the spot.
Be ready to offer the seller the time they need to pack up and move out. Offering a
leaseback option if the seller hasn’t found their next home can sweeten your deal
even farther. The time and trouble that you just went through to find your new
home may be something that the seller could also face. Offer them the chance to stay
in the home a little longer while they search for their next home.
By Karl Kennedy.