Whether you’re upgrading, downsizing, or buying your first home, the process of searching for the right property and putting in an offer is both challenging and exciting. This is especially true when it comes to making an offer in a seller’s market. It may take you as many as five or ten times to finally get the property you want.
If your offers keep getting declined, it’s easy to start wondering what you’re doing wrong. Are your offers too low? Is the timing off? Do you look like a risky buyer? The truth is that a number of things could be derailing your offers.
In order to avoid rejection, you need to focus on making your offers more attractive and compelling.
From a seller’s perspective, the most attractive offer is an all-cash offer. When an all-cash offer is in play, sellers don’t have to worry about mortgages, lenders, approvals, delays in escrow, or stringent appraisal requirements. This speeds up the process and reduces the likelihood that something will invalidate the deal or cause a troublesome hitch.
Unfortunately, cash isn’t always an option. Don’t worry, though. Only a small fraction of offers are ever all-cash. This means you don’t have to worry about competing with all-cash offers. It’s simply one method of standing out, and there are plenty of other ways to spice up your offer.
The next best thing to a cash offer is getting pre-approved. In fact, many sellers and their agents will actually require you to show proof of pre-approval in order to place a valid offer.
“It happens every day,” says Patty Da Silva, a Florida-based real estate agent. “I can’t believe I still get offers today without a preapproval. You have to have a preapproval and it must be a real preapproval where the lender has verified not just your credit, but bank statements, tax returns – and I call the lender to verify that.”
If your agent has told you that you don’t need a pre-approval letter, it’s time to hire someone new. You should start the pre-approval process at least a couple months prior to shopping. This gives you ample time to gather documents, contact potential lenders, and allow them to process your information.
Far too many home buyers place offers that they wouldn’t accept if they were in the seller’s shoes. You have to understand the market you’re operating in and give the seller what they want.
For example, let’s say you’re in a seller’s market. Would a seller have any reason to accept an offer of $185,000 on a property that’s listed at $200,000? Absolutely not. In all likelihood, they’re going to get their asking price. They may even be able to sell above asking price. Your offer of $185,000 will be rejected immediately.
Think about what you can realistically offer and what the home is worth. If the numbers line up, give the seller exactly what they’re asking for. Unless they receive a bunch of competing offers, they should accept with little hesitance.
One of the biggest mistakes buyers make when placing an offer is adding lots of contingencies, rules, and requirements. While some contingencies are necessary in order to protect your own interests, think twice about adding superfluous clauses.
The one contingency you do want to include is a home inspection contingency. You definitely don’t want to put up an offer without having a professional come in and look at things like the roof, foundation, HVAC, structural integrity, and other important elements.
Prospective buyers often put in contingencies based on the sale of their current home. While this is fairly commonplace, consider leaving it out in order to differentiate your offer. You can always rent your home, lower your asking price, or carry the home for an extra month in a worst-case scenario. Don’t let this contingency keep a seller from accepting your offer.
One of the biggest favors you can give the seller is time. While most buyers are anxious to get into their new home – especially if they’ve already sold their home – sellers often need time to complete the purchase of their next home, pack up their belongings, and take care of loose ends.
By letting the seller set the closing date, you increase your chance of getting your offer accepted. This small gesture also shows the seller that you’re cooperative and ready to make a deal. Whereas most buyers are meticulous and demanding, you can set yourself apart as someone who is willing to work with the seller.
Remember that sellers are people too. They have families, feelings, and emotions. Sometimes you can make your offer stand out against other identical offers by humanizing yourself. Consider relaying information through the seller’s agent. Tell them why you want the home. Explain your favorite features of the property. Let them know you understand what they’re going through.
When you write a letter or communicate little details through the seller’s agent, you become less of a number and more of a person. This ensures you won’t be overlooked, and may be the tiny advantage you need to propel yourself to the top.
At Green Residential, we understand what makes buyers and sellers tick. When you work with us, you instantly gain access to our wealth of knowledge and resources. We can help you sell your existing home using a flat rate commission structure that saves the average homeowner thousands of dollars. This ultimately allows you to place more competitive offers that sellers will be more likely to entertain.
If you’re interested in learning more about our flat rate structure, then please don’t hesitate to contact us today. We’d be happy to discuss your options in further detail and answer any questions you may have about the process.
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