By now you know, that it’s a sellers market. In fact you might have already submitted several offers without any luck. It can be frustrating. So what can you do? Below are a few tips that could win you a contract, if not, at least you’ll keep your sanity. Priceless.
Have the right attitude
Look at a property with a clear mind and eye and invest fewer emotions. This will make it so much easier to just move on when you don’t win when in competition with other offers. Will this get you an offer accepted? NO, but it will make it so much easier to move on if it hasn’t.
Don’t be shy – throw your hat in the ring
Be prepared to have one or more competitive offers on the table. Not so much now anymore, but a few years ago I’ve had buyers say “I don’t want to compete with other offers”. It’s pretty much standard now that there WILL be another offer or even more. Give your best offer and throw it in the rink.
Every real estate agent handles competitive offers differently. Some simply ask for you to provide “Your best offer”. In the price range of $300,000 and under, you need to bring your best offer when you submit it. So, feel confident you have given it your all when you are competing and if you get it, great -if not, shrug your shoulders.
As mentioned, every offer situation is different. Reason for that is, of course, partly, how the agent handles multiple offers and how the seller would like to have a multiple offer situation handled. Not every agent asks for a highest and best, but simply presents the offers and the sellers choose.
Your Net Offer
Price is a big factor when selling a home, however, for sellers this is not just about the price offered, but also what items the buyer is requesting the seller to pay. So agents prepare spreadsheets to look at the net offer. In markets with 10 or more offers, those spread sheets come in handy to determine the best net offer ( Offer price – any cost the seller is carrying for the buyer)
Especially if the seller already butts on the upper line of what the listing agent could get “approved” by an appraiser, a exceptionally high offer is not helpful as that could break the contract two thirds through the transaction. It’s a bummer to say the least. What options does the buyer have?
If you do not absolutely need sellers concessions (sellers contribution to closing cost), don’t ask for them. This will keep your net high will it keeps the sales price down.
Pay for your own title insurance. Pay for other small fees and charges, that usually get charged to the seller ie. HOA statement fees, closing fees etc. This could make a difference of $1000+.
How about paying for part (or all) of the buyers agents success fee (commission)? Sellers have for the longest time paid for both, the sellers agent and the buyers agent. You could potentially save him a huge amount of money by offsetting some of those cost. With this strategy you might be able to deduct these cost from your taxes if they are labeled “Closing Cost” – please consult your tax professional before you proceed with this strategy.
But…There Is More Than Just Price
Particularly, when offers are close, sellers look at more than just price, also make sure you take a look at these parts of your contract and make an offer that could appeal to the seller yet still makes you feel comfortable with the purchase:
- How much of a down payment do you have?
- How are you financing the purchase?
- Who is the lender?
- Are you prepared ie. pre approved?
- How fast can you close?
- Which contingencies do you have in your contract? Do you have ANY contingencies? ie. if you are having to sell a home first before you can close? That’s a tough one, and chances are that a contingent offer will only work in certain price ranges.
- What else are you requesting? Home warranty? The riding lawnmower in the garage?
If a cash buyer is in your mix of competitive contracts: You lose. Yes, just like that. Cash buyers can close quickly, are more flexible with dates, do not need an appraisal or other contingencies.
Don’t Give Up
If your offer was rejected, shrug your shoulders and move on. Don’t give up after you’ve lost a (or several) contracts. Maybe review focus, timing and maybe location options. Just remember, that you can change everything about a home but the location.
Make a back up offer.
Just like in an auction, many buyers get swept away in a multiple offer situation. It could be the thrill, excitement and hope that they have finally found THE ONE house with a chance to move forward and move on. Once they’ve had time to rethink, maybe see the inspection report, attitudes change. The relief of finally having had an offer accepted is pushed aside by the fear of overpaying for a home. This is the time when deals fall apart.
Wouldn’t you like to slip right into that buyers position, when this happens, instead of having to compete again with other buyers? This is why making a back up offer is beneficial for buyers AND sellers. Submit an offer, that allows you to automatically become the new contract the moment the “senior” contract terminates. Of course, you could still have all your inspections and due diligence times allowing you to back out should you find any unacceptable condition in or about the home.
I have had 3 offers accepted this way.