There is no doubt that many areas of the country are in a seller’s market, with some regions like Sacramento, California suffering significant housing shortages that are contributing to price hikes. Too often, homebuyers are facing stiff competition when they make purchase offers, even if they are well qualified, only to be outbid by droves of other buyers.
But there are some important strategies home shoppers can employ with the help of their Realtors to give their offers a better chance of being accepted. With a little planning, out-of-the-box thinking, and elbow grease, you’ll be able to get the keys to your dream house in short order.
1. Always reply to counteroffers quickly.
Time is of the essence for most sellers, and it’s important to strike while the iron is hot to get your offer accepted. That means submitting a great offer as soon as possible once you know you want the home, and responding to any counteroffers the same day if possible. That will keep the momentum alive and give you the best chance of getting into escrow.
2. Get preapproved for a conventional loan.
While government-backed loans like FHA, VA, and down-payment assistance programs have a place and serve a purpose, they may be viewed as a mark against your offer by a seller. These loans often come with extra conditions, regulations, and procedures, which can slow down your loan, delay the closing – or kill the deal altogether.
3. Keep your contingency periods short.
Most real estate purchase contracts come with a standard 17-day contingency removal period, in which the buyer can conduct his or her inspection, review disclosures and reports, get an appraisal, and request repairs. To sweeten the pot for a seller and show them that you are ultra efficient and motivated, write in a shorter contingency period. You can still perform the same due diligence, just faster.
4. Increase your down payment.
As a general rule, the bigger the down payment, the more invested and stable a homebuyer appears. By putting down 20% or more down payment, your offer will be much more attractive to the seller.
5. Increase your earnest money deposit.
If you can’t boost your down payment, then a great way to get your offer noticed is to increase your earnest money deposit well above the standard. Remember that if you find something that doesn’t sit right when you do your home inspection and appraisal and don’t want to move forward with the purchase, you’ll still be able to do that before you remove contingencies – and get your deposit back.
6. Leave a Thank You note.
Does that sound trivial? Believe it or not, a homeowner probably feels pride and strong emotions about the home, and by leaving a quick Thank You note the first time you view a property you really love, they’ll appreciate that you feel the same.
7. Ask the seller what’s most important to them.
Have your Realtor communicate with the seller’s Realtor and find out what’s the most important factor in the sale, above and beyond price. Maybe they need a quick close so they can move out of town or want to get it sold before holidays? Perhaps, they’ve had buyers back out in the past or ask for too many repairs and just want to know that you’re truly interested. Knowing their “hot button” can go a long way to getting your offer accepted.
8. Offer a fast closing.
Sellers hate to wait around until the deal closes and their check clears, so offer a short closing. As long as we are organized with your loan and paperwork and no unexpected issues occur, most home purchases can be closed in 30 days or less.
9. Make an all-cash offer.
There’s nothing that gets a seller’s attention like an offer to buy their home without a mortgage loan involved. Of course, this isn’t an option for most people, but it’s worth mentioning.
10. Submit a non-contingent offer.
If a seller sees that your offer is contingent on selling your home first, your chances of getting it accepted are greatly reduced. Sell your home first, and then move on as a strong, ready buyer.
In part two of this blog, we’ll cover 10 more ways homebuyers can get their purchase offers accepted in this seller’s market.