1. Make Your Offer As Clean As Possible
A clean and no contingency means that you’re waiving all contingencies to make your bid a bit more competitive and appealing to the seller. A clean offer should not be contingent on the sale of another property or have other financial constraints. It should also be free of seller concessions, which are things that a buyer asks for outside of the offer price, such as help with closing costs. When a seller is receiving a ton of bids, choosing to make a clean offer can help you beat out other offers with contingencies.
The traditional contingencies are like a deck of cards you hold to your chest as protection: loan, appraisal and inspection are the main ones. As you lay them on the table, you give them up, which makes your offer more appealing to a seller because you have less opportunity to back out of a contract that you write.”
Even if you don’t add contingencies to your offer, there are still ways to protect your interests. For example, you can get your loan fully underwritten. This means that you will complete the entire loan process with your lender before making an offer on a home. Then when you put an offer in you can confidently put down your loan contingency with little to no risk.
You also may want to consider giving up your inspection contingency. If the seller has provided inspection reports from reputable companies, then you can do this with little risk involved.
2. Avoid Asking For Personal Property
Drooling over the sparkly chandelier listed in the exclusions? Don’t ask for it. Want them to throw in that cool lawn furniture? Skip it. Your offer could be very similar in price to another offer that isn’t asking for items that belong to the seller. Asking for excluded items could weaken your offer.
If you want a chandelier or lawn furniture, go to Home Depot. If you want to seriously compete for and win the bid on this house, it is important for you to remain focused in achieving your goal: buying the house, and hope your competition falls in love with the chandelier.
3. Offer Above-Asking
The seller’s market is not the place for making low offers and hoping someone will bite. You will have to make your offer strong enough to beat out a multiple bid situation. If you want the house, you’re likely going to have to go above the asking price.
Don’t allow the thought of offering over the asking price to overwhelm you. Sometimes, you only need to offer $2,000 – $3,000 more to get the seller’s attention. Doing this will show the seller that you’re serious about buying the home, and that you want them to consider you as a potential buyer.
Making an offer above the asking price won’t end up costing you much in the long run. What you put down and what you pay monthly on your mortgage will only change significantly if you offer an amount far above asking. Keeping your offer aligned to the home’s value, while still above the asking price, will help you secure the home you’re interested in.
4. Put Down A Stronger Earnest Money Deposit (EMD)
Your Earnest Money is proof that you are a good-faith buyer. Usually, the real estate broker will hold onto your EMD and put it in an escrow account. Later on, your EMD can contribute to your down payment and closing cost. On average, EMDs are about 1 – 3% of the purchase price of the home. If you put a larger amount down, it may show that you are a serious buyer and that your intentions are genuine.
But, if you do put more of an EMD down, make sure you intend to buy the home. If you don’t end up moving forward with the purchase, your EMD may be in jeopardy. If you’ve already signed the contract and don’t buy the home, the seller could keep your EMD as compensation for the time wasted.
5. Waive The Appraisal Contingency
An appraisal contingency can be given up as well – but, this poses the most risk unless you have enough cash to cover any potential shortfall between offered price and appraised price.”
This is a huge one in neighborhoods that are experiencing a resurgence in property values or gained interest. An offer indicating your intention to bring money to the table if the home doesn’t appraise will set you apart from the others. Just make sure you are in a strong financial position to take this risk.
6. Make A Larger Down Payment In Your Loan Program
No matter what type of loan you choose, offering to pay more down is another sign of good faith to your seller. Anytime you can showcase that you’re in a good financial position, you should do so. By putting down a larger down payment than you have to, you send the message that you’re serious about the purchase and capable of meeting all financial obligations.
7. Make Sure Your Offer Is Complete
Paying attention to the details of your offer should be a no-brainer, but every day there are mistakes made in this process. This may include missing disclosures, EMD or pertinent information for the purchase agreement. In a competitive market, mistakes like these may result in your offer getting tossed.
If a seller receives multiple offers that are complete, they may not give your offer a second look. If you want to make sure you have a chance in the running, make sure to cross your “t’s” and dot your “i’s”.
For more tips and ways to succeed in getting the home of your dreams please contact me and I’ll be happy to help.
Thomas Babyak
NextHome Force Premier Realty
Tom.nexthomenj@gmail.com