The real estate market has been crazy for the last couple of years. The media calls it a “Seller’s Market” or sometimes a “Frenzy”, but trust me, it is crazy. What it means to you as a buyer, is that we have to go to great lengths to get offers accepted by Sellers. As your agent, we do a lot of work behind the scenes to make sure that your offer will get accepted. We work hard to build relationships with other agents, communicate with listing agents through the looking and offer process, and anything else it takes to get in the good favor of the listing agent. It is up to you to choose terms and conditions that will be the very most attractive to a Seller when it comes to making the actual offer. These tips will help your offer to get accepted.
Earnest Money
Whenever you make an offer on real estate you need to include earnest money. It is usually about 1 to 2% of the purchase price. The earnest money is applied towards your down payment. A few years ago it was extremely common for earnest money to be completely refundable until after the financing and appraisal on the property were done. These days, in order to get an offer accepted, it is not unusual to make part or all of the money non refundable upon acceptance! That means that you are fully committing your earnest money before you have even had a chance to do a thorough inspection. The risk is that something major comes up during the transaction and you end up losing the earnest money. Though it is risky, this bold move often pays off and getting an offer accepted.
Appraisal Waiver
If you have a big enough down payment or are paying cash it is possible to waive the appraisal condition. Sellers are very concerned about their home appraising for enough money in a market with prices increasing so quickly. If you plan to make a 20% down payment but have an extra 10% on hand you could offer to pay the difference if the appraisal comes in lower than the accepted price. Obviously, with cash the appraisal is irrelevant so you should waive it every time.
Waive Due diligence
If you are confident about the condition of a home, the area and any other relevant information, you could waive the due diligence condition. Normally the due diligence condition allows you to cancel the contract for any reason. When you waive this condition it is a clear sign to a seller that you are committed to purchase the property. There is usually enough time before making an offer to verify many details about a property. If you are confident enough to waive this condition you might just get your offer accepted.
Waive Financing
You could also choose to waive the financing condition. If you are completely confident that your loan is going to go through, this is an easy condition to eliminate. Not to harp on the issue, but getting your financing sorted out completely and early is the best approach! When an offer is not conditioned upon financing it is one less thing a seller has to worry about and improves your chances of getting your offer accepted.
Timing
Most sellers want to close as soon as possible and get as much money as they can but that is not true in every case. We do everything we can to understand the motivations of the seller and match your offer to their needs. Occasionally there is a unique one, but normally if you can close faster you have a better chance of having your offer accepted. This is the main reason why cash offers are so attractive to sellers.
Rent Back
If you are flexible as a buyer and have a place to stay it can be extremely attractive if you offer to rent the property back to a seller. If you are doing a loan you can only rent back for up to 59 days. If you are paying cash you can make whatever is needed work for the Seller. Most of the time the rent is set at whatever the Buyer’s payment is, but if you can make the payment while not living in the house a free rent back can be a big motivation.
We work hard to make sure that your offer is as competitive as possible regardless of your situation. Not everyone can write an offer that is a dream for a Seller, but you can improve your odds by having someone in your corner that will make sure your offer is as strong as possible.