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How To Get Your Offer Accepted In A Strong Seller's Market
Dated: September 22 2020
How to Get Your Offer Accepted in a Strong Seller’s Market
Getting an offer accepted in a multiple offer situation takes a bit of strategy and finesse. We’ve put together a list of tips and strategies we use to make sure our client’s offers stand out against the competition.
Tip 1: Get Pre-approved: All offers written on documents from the state’s real estate board require a pre-approval be attached. If you are truly serious about purchasing a home let us get you in contact with a lender if you need one.
Tip 2: Earnest Money: There are a couple of different strategies you can use to give the seller more confidence in accepting your offer.
-Increase your earnest money deposit: Earnest money sits in escrow and will revert back to the seller if the buyer breaches the terms of their offer. There are only two exceptions to this.
-Exceptions during a sale in the State of Arizona that a buyer can get earnest money back:
-During inspection: If you’ve completed an inspection and have decided that home requires too many repairs you can walk away from the house and take your earnest money with you.
-If you don’t qualify for the loan: If the underwriter decided not to issue a final approval, you can also walk away from the house and take your earnest money with you.
-Make your earnest money non-refundable: If you’re confident that the house you are buying is “the one” you can also let the seller know you are serious by removing the two reasons above that allow you to get a refund. This means you are confident that your financing will be approved and you are not worried about repairs.
Tip 3: Pay the Seller’s Closing Costs: In a crazy seller’s market, homes may not appraise when a buyer offers for a lot more than asking price. That’s why offering to pay the seller’s closing costs along with your highest offer is usually the best combination.
Tip 4: The Home Inspection: ALWAYS GET A HOME INSPECTION! What you do about it matters. Here are some options that seller’s like to see:
-Shorter inspection period: Default verbiage in most offers allow the buyer 10 calendar days to inspect the property. You may want to shorten that to 5 to 7 days.
-Waiving repairs: You may want to waive your right to ask the seller for repairs. This gives the seller the confidence that, even after you’ve completed an inspection, you will move forward with the purchase without further negotiations or haggling. You will be responsible for the repairs.
Tip 5: Include an Escalation Clause: With this clause, you state that if another person bids higher than you, then your bid will automatically go up as well. An example of this could be that you will offer $500 more than any other bidder until a certain amount. The risk of this clause is that it shows the seller the maximum amount you’re willing to offer for the house, so don’t put more than you would want to pay.
Tip 6: Don’t Ask the Seller to Pay Your Closing Costs: Closing costs vary when purchasing a home. This amount will be a combination of the fees your lender charges along with title/escrow/hoa fees. If you don’t have money to cover all of these costs, ask your lender what they can do to roll in your closing costs.
Other strategies we use: Finding out what is most important to the seller when writing an offer always varies. This may include finding out things like, do they want a shorter closing time? They may want a fast close because they are moving fast. Do they want a longer closing time? If they still need to find a new place to live this is important. Will they make repairs? Do they not have the money for repairs or are they out of state and will have a hard time coordinating them? And lastly, submit a letter. This pulls on their heart strings a bit if you submit a letter why their house is perfect, along with a photo of your family.
John Lick--brings his vast experience in contracts and negotiations to the Maurice & Lick team. Prior to becoming a full-time Realtor, he worked for a multi-billion dollar government agency and with ....
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