With demand continuing to outweigh the number of homes for sale across the United States, having an offer that stands out from the competition can mean the difference between getting the house you want – and losing out. (You can see the lowest mortgage rates you can get now here.) Here’s what the pros told us about getting the house you want, despite the competition.
Show them the money, in one way or another
This one probably comes as no surprise, but money talks, and you can make it talk in a number of ways. The most obvious, of course, is to offer over asking, and even a few thousand dollars can make the difference between winning a house and losing out on it. Comps and advice from your real estate agent and their relationship with the seller’s agent can help you determine how much you’ll need to go over asking – though sometimes, it’s truly just instinctual. “But remember, anything you offer over the appraised value of the home, and your loan amount, will be your responsibility to cover,” says Realtor.com home and lifestyle expert Lexie Holbert.
Another option? “Increase your earnest money (the deposit when you make an offer) from the standard 1% to 10-20% to show the seller you’re serious,” says Holbert. Or you could, if you had the money, make an all cash-offer, which would entice the seller with a quicker closing.
Consider all the factors that a seller might be thinking about
“Sellers are oftentimes reviewing multiple offers on a spreadsheet, comparing all the offers received. You want to strategically position your offer to look better in each category, ”says Justin Feil, realtor with The Feil Group. Aside from the offer amount, these spreadsheets will likely indicate length of escrow and any leaseback periods or contingencies (like that a buyers can’t put down much for their deposit until their current home enters escrow). Think about what the seller really wants, and “work within your budget and create the absolute strongest version of an offer within that criteria,” he says.
Get a pre-approval letter specifically for the home you want to buy
Sellers want to make sure that at the end of the day, the sale is going to go through. That’s why it’s key in these trying times to get a pre-approval letter from the mortgage lender. “In addition to getting a pre-approval letter before you start home buying, ask your lender to prepare one that’s specific to the home you’re bidding on,” says Holbert. Feel notes that this process can often take 45-60 days, but says: “It can provide a significant strategic advantage in that you can potentially remove your loan contingency, thus making your offer much more attractive to a seller.”
You can see the lowest mortgage rates you can get now here.
Alter or waive contingencies
From a home inspection contingency to an appraisal contingency and even a mortgage contingency, Taylor Simon, luxury real estate agent with the Aaron Kirman Group in Los Angeles, says: “Sellers want to close fast so… keep your contingencies as short as possible.” Because contingencies provide a way for a buyer to back out of a deal, keeping them to a minimum can help appease the seller. And Feil says, “If you can not remove a given contingency, see if there is a way you can aggressively tighten the contingency timeline, while remaining protected from financial risk.”
Be flexible on timing
Agree to a closing date that accommodates the seller’s needs. “Following your closing, they might want to stay in the house for a few days or do a buy-back where they’d rent for a set period,” says Holbert.
Look into adding an escalation clause
Some agents do not like to see this because the strategy is often abused, but adding an escalation clause shows you’re willing to do what it takes to get the home. “An escalation clause essentially states that you’re willing to pay X amount over the highest price. You can also put a cap to this and request that you are shown proof of the highest offer before moving forward, ”says Simon.
Make it personal
People often love their homes, and want to sell to someone who will love it too. Consider writing a personal note introducing yourself and explaining what you love about the home. You can even include a photo of your family or send flowers to the sellers to show them you’re really serious about sealing the deal.