10 Creative Ways to Get Your Offer Accepted
Sometimes, you have to get a little creative to stand out in this busy market.
Over the past year, the real estate market has been so hot that it’s not unusual for homes to go off-market in days. (The lack of inventory is to blame.) When even homes that need serious work are breaking price records, it is easy to feel discouraged if you’re trying to buy right now.
Don’t give up, though. Getting your offer accepted isn’t necessarily about coming in with the biggest bag of money. It’s really being able to anticipate what, exactly, the seller’s goals are and creating the offer that solves all of their problems. While your agent will weigh in with a strategy based on your market, there are a few common ways you can make your offer stand out. Whether you’re dealing with competition from investors or want to be sure you are making the best impression as a potential buyer, here are a few things that’ll increase your chances of a successful offer.
Hire an agent with connections
A large part of getting an offer accepted is the communication between your real estate agent and the seller's real estate agent. If your agent has connections or can communicate effectively, the deal is more likely to move forward. Your agent should be asking the seller's real estate agent what their client needs to get out of this deal. Is it the most money possible? Is it a specific timeframe, or do they need to rent the property back while searching for a new home? Knowing those needs and submitting an offer that meets them is vital.
Get in early
Staying in touch with your real estate agent pays off big. They’ll let you know as soon as homes enter the market, especially if they have many connections to other agents. Sometimes, agents will hear directly from other agents about a home that’s about to get listed — or that won’t enter the MLS at all (this is typically called a “pocket listing”). Regardless of how your real estate agent finds the home that fits your needs, be the first to book a showing and get ready to make an offer on the spot.
Be prepared to go over asking
In a seller’s market, it’s rare to find a bargain. While there are scenarios where you may end up successfully offering under-asking price (local market trends will inform our strategy), expect to offer a little more for the home you really love.
Offer earnest money
Earnest money is a cutely-named deposit made to the seller and held in escrow. It’s made after the seller accepts your offer and shows that you’re serious about buying. It’s not “extra” money because it’ll eventually be applied towards your deposit and/or closing costs. The typical amount is 1-3% of the purchase price and due within a few days of the seller accepting your offer, so make sure this money will be ready if you’re offering it.
Proof of funds
If you plan on offering more than the asking price or giving a hefty appraisal gap, then providing proof of funds for this can go a long way. This can help show the Seller you're a serious, strong buyer!
If you’re open to the seller choosing the closing date, you may just get an edge over other offers, especially if the home just went on the market. Think of it this way: Sellers are also usually trying to find another home while selling theirs and may need more time. If the seller is in this boat, the idea of having extra time may be worth more than the extra money another buyer is offering.
Nix the contingencies — when it makes sense to do so
A contingency is something that makes your offer conditional based on something happening. The three most common contingencies in a buyer’s offer are loan, inspection, and appraisal. Making an offer contingent on getting a loan, an inspection with minimal issues, or appraising for the amount you’re offering, presents multiple opportunities for the transaction to fall through. If you’ve been preapproved for a loan, the seller has had the property inspected by a reputable company, and you’re confident that the property wouldn’t appraise at a lower value, discuss with your agent whether or not you need these contingencies.
Beat out investor interest with a strategic offer
If you’re in an area that’s caught the attention of investors and flippers, don’t lose hope. Winning out over these types of offers is a matter of thinking of the downsides of accepting investor offers. For one, investors tend to offer all-cash but make lower offers because they’re offering cash. Second, they often want the property ASAP, forcing the seller to consider a quicker timeframe than they’d like. You can potentially beat investor offers by making an offer at the asking price (or slightly higher) and emphasizing flexibility on time frame.
Consider an escalation clause
An escalation clause in your offer means you’ll increase your offer to a certain price if another offer comes in. (It’s kind of similar to how, in an online auction, you can set a price limit, and bids will be entered automatically until that point.) In this competitive market, some listing agents and sellers are requesting NO escalation clauses as it can be tough to sift through multiple offers with multiple escalation clauses. Your realtor can advise you if this is the best route to take to make your offer competitive and stand out.
Make sure you have your ducks in a row
Ensuring that you have your paperwork sorted, earnest money put away, your downpayment funds ready to go, and your real estate agent ready to write an offer as soon as you find "the one" will make the entire process go as smoothly as possible.
The first types of offers that sellers will likely reject are ones from only pre-qualified buyers for a mortgage. Pre-qualification means that a mortgage company has really just taken a glance at your financials to give you a rough estimate on what the amount and interest rate would be. (Often, pre-qualification doesn’t even involve a credit check.) In a seller’s eyes, this means that a lot of things could sink the transaction.
Instead, get a pre-approval. This is a more rigorous process that will look at your credit report, verify pay stubs, bank statements, and other financial documents. If you pass their underwriting requirements, the lender will give you the actual numbers for the loan you’ll be able to get once you find a home (and then provide you with a letter to provide as proof).
If you’re very serious about getting your dream home, you may be able to get a pre-underwriting letter. This is a more thorough process that includes a thorough examination of financials and other documentation needed for a mortgage. Chat with your lender about how to make your pre-approval letter strong!
Don’t ask for anything
Even if there’s a gorgeous chandelier you’ve spent years searching for, keep it out of your offer. The key to getting your offer accepted in a heated market is to present the easiest, stress-free scenario for a seller. While they may be open to including particular items in the sale, making requests may give the impression that there will be a lot of back-and-forth with the transaction.
The most important thing to remember...
We've shared some common strategies that are being used in today's real estate market but our team has a few more strategies up our sleeves to help your offer stand out. HINT: It's not always about price! Sometimes it comes down to stronger terms.
FACT: In some cases, you won't need to compete in multiple offers.
If you're looking to buy or sell in today's real estate market, let's chat! We are happy to help you figure out of now is the right time to jump in or if you should wait. We can also help you prepare and help make sure this is a smooth process for you!