In This Tough Market, 3 Real Estate Professionals Explain How To Get The Home You Want
With demand continuing to outstrip the number of homes for sale in the United States, having an offer that stands out from the competition can be the difference between getting the home you want and losing. (You can see the lowest mortgage rates you can get now here.) Here’s what the pros told us about getting the home you want, despite the competition.
Show ’em the money, somehow
This one probably comes as no surprise, but money talks, and you can make it talk in a number of ways. The most obvious, of course, is to offer rather than ask, and even a few thousand dollars can mean the difference between winning a house and losing it. Your real estate agent’s compensation and advice and their relationship to the seller’s agent can help you determine how much you’ll need to exceed by asking – although sometimes it’s really instinctive. “But remember, anything you offer beyond the appraised value of the home and your loan amount will be your responsibility to cover,” says Lexie Holbert, home and lifestyle expert at Realtor.com.
Another option? “Raise your deposit (the deposit when you make an offer) from 1% to 10-20% to show the seller you’re serious,” says Holbert. Or you could, if you had the cash, make an all-cash offer, which would entice the seller to close faster.
Consider all the factors a seller could think of
“Sellers often review multiple offers on a spreadsheet, comparing all offers received. You want to strategically position your offering to look better in each category,” says Justin Feil, realtor at The Feil Group in Berkshire Hathaway. In addition to including the bid amount, these spreadsheets will likely list the escrow length and leaseback periods or contingencies (like a buyer can’t deposit much for their down payment). until his current home went into receivership). Think about what the seller really wants and “work within your budget and create the strongest version of an offer within those criteria,” he says.
Get a pre-approval letter specifically for the house you want to buy
Sellers want to be sure that ultimately the sale will happen. This is why it is essential in these difficult times to obtain a pre-approval letter from the mortgage lender. “In addition to getting a pre-approval letter before you start buying a home, ask your lender to prepare one that’s specific to the home you’re bidding on,” says Holbert. Feil notes that this process can often take 45 to 60 days, but says, “It can provide a significant strategic advantage in that you can potentially remove your loan contingency, making your offer much more attractive to a seller.”
You can see the lowest mortgage rates you can get right now here.
Change or waive contingencies
From a home inspection contingency to an appraisal contingency and even a mortgage contingency, Taylor Simon, luxury realtor at Compass in Los Angeles, says, “Sellers want to close fast so…keep your contingencies as short as possible.” Since contingencies allow a buyer to walk away from a deal, keeping them to a minimum can help appease the seller. And Feil says, “If you can’t remove a given contingency, see if there’s a way to aggressively tighten the contingency schedule, while still being protected against financial risk.”
Be flexible on schedules
Agree on a closing date that meets the seller’s needs. “Following your closing, they may want to stay in the house for a few days or do a buyout where they would rent for a set period of time,” says Holbert.
Consider adding an escalation clause
Some agents don’t like to see this because the strategy is often abusive, but adding an escalation clause shows you’re willing to do whatever it takes to get the house. “An escalation clause basically says you’re willing to pay X amount more than the highest price. You can also put a cap on that and ask to be shown proof of the highest bid before bidding. ‘move forward,’ says Simon.
Make it personal
People often love their home and want to sell to someone who will love it too. Consider writing a personal note to introduce yourself and explain what you like about the house. You can even include a photo of your family or send flowers to sellers to show them that you’re serious about closing the deal.