With the current seller’s market continuing into the Spring, it’s no surprise that buyers have to be sharp, get creative, remain flexible, and really know what they are comfortable agreeing to in order to outperform competing offers. I encourage anyone looking to buy a home this Spring to prepare ahead; the strategies outlined below will increase the success rate of your next offer being the one that sticks!
5 ways to Get Your Offer Accepted in a Seller’s Market
1. Know What Sellers Want
Nothing is worse than blindly making uninformed offers and hoping you’ll magically crack the “secret seller code”. The truth is, it takes some effort - but early engagement with the sellers and listing agent to understand what matters most can make a meaningful difference. While money and terms are significant key drivers, there are other variables that are unique to each seller. The more boxes you can check on their needs and tailor your offer to their wish list, the more favorable your offer will be when taken into consideration for final acceptance.
2. Know What You Can Afford and Avoid Buyer’s Remorse
Working with your agent is key here to know where prices are heading and what you can expect a home to appraise for that you may be considering. Homes continue to sell well over list price and if you are considering making an offer under such conditions it’s important to know what your threshold is and the financial impact of different scenarios. Often, homes closing over list price have been accompanied by an appraisal gap - or in some cases an appraisal waiver. Meaning regardless of what the appraisal evaluation states the home value is, a buyer commits to close at the agreed offer price and has the financial capability to do so. This is a big mindset shift and also requires a long term outlook on the market. In addition, including financial statements and a bullet proof mortgage pre-approval are paramount when presenting these types of terms.
3. Keeping Contingencies Clean
Part of making yourself compelling to sellers is ease in the transaction and casting a clear vision for them with little to no obstacles in the process if they choose to work with you. The best way to do this is ensuring the least amount of contingencies you are comfortable agreeing to and remaining flexible and accommodating in timelines. While it is not uncommon for inspections to be waived in many recent transactions, I never recommend this to my buyers, however limiting the items you want addressed post inspection will show sellers you are not going to nitpick or make unreasonable requests. The most standard these days is limiting the inspection call outs to mechanical, structural and environmental with mostly other items being out of bounds. In addition to limiting the call out items, setting a dollar amount cap will make it even more attractive.
4. Home Sale Contingencies
Unfortunately this is not one that will get your offer to the top of the list, but perhaps you have other compelling factors that make your offer superior and the seller likes everything else except the uncertainty of your home having to sell before settling on your purchase transaction. The further down the road you are on the sale of your home the better if you can demonstrate you have cleared contingencies and process milestones with a short and tight timeline to settlement. Providing supporting documentation such as contracts, your buyer's mortgage commitment status and proposed net cash to seller will help strengthen your position when you are faced to compete with this contingency.
5. Love Letters
I would be remiss to leave this one out and I have also seen push back or clear instructions from agents that personal letters will not be accepted or communicated to buyers, but this strategy still works in the right circumstances and if they are genuine. After all, these are life changing transactions on both sides with so many emotions attached. There are still many sellers who truly care and want to know more about who will be the next owners of their home beyond just exchanging title and money. Consult your agent in advance to know what guidelines to follow when including a letter and it’s always good to have a template on hand you can personalize to the situation and that will help resonate with the sellers.
Sealing The Deal
The above best practices are sure to help your offer stand out from the crowd. Most importantly, working with an experienced real estate agent who has a proven track record also helps to seal the deal. You need someone who is thorough and thoughtful and moves quickly to prepare the best offer possible.