How to Write a Successful Offer in a Low Inventory Market
With nearly 2/3 of homes selling over the asking price, and with 40% fewer homes on the market, there just aren’t enough homes listed for sale to satisfy the demand from the buyers.
Compared to how the market was a year or two ago, today’s buyers may have gone through the process of disappointment and distress from losing a home they wanted to purchase.
Nowadays, serious home buyers are actively searching for effective ways to improve their chances of making the best offer, without having to rely on the purchase price as their only tool for success.
Buyers should start to reconsider what they want in a home. To be a smart home buyer, one must remember to make S.M.A.R.T decisions – Specific, Measurable, Attainable, Relevant, and Time-bounded. This simple acronym can help you rethink and re-evaluate your personal needs or wants when purchasing a home at the price point of your choosing. Grab a pen and paper, and list down the basic details, basic attributes, and basic long- and short-term goals that will make the most sense to you. Think SMART, assess, and identify the critical and convenient points that will make a great impact in your home-buying journey.
The next crucial step in the home-buying process is to establish your “Home” Team. Remember, you are the captain of this journey, however, it is vital to have a first mate along with you – your Real Estate Agent. Your Real Estate Agent will help you tread the waters safely and securely by overseeing the process, advising you on the current market condition, and leading you through the normal home-buying process. Your Agent will even help you complete your “Home” Team by recommending relevant and professional service providers, i.e. mortgage officer, title, insurance, warranty, inspectors, and the like.
Before writing your offer, your agent can inquire with the listing agent about any preference or options the seller has not mentioned in the listing agreement. These include the use of additional contract forms and addendums.
When preparing your offer, your Real Estate Agent can support your cause to the listing agent personally by delivering the offer and expounding on your strong points to influence your position. With that being said, keep in mind that your agent is your advocate and will not share or submit anything that you have not and will not consent to.
The following list of suggestions is provided for your consideration realizing that some may not be appropriate for your individual financial situation or comfort level.
· Get pre-approved from a local lender and include documentation with an offer to purchase.
· Have lender phone and email listing agent to expound on pre-approval.
· Increase the amount of earnest money.
· Acknowledge flexibility on closing and occupancy dates.
· Eliminate unnecessary contingencies.
· Waive the appraisal and have proof of funds to meet the difference in the purchase price.
· Avoid concessions like asking the seller to pay the buyer’s closing costs or points.
· Avoid including personal property to go with the sale unless specified in the listing agreement.
· Purchase “as is” with the right of quick inspection to cancel contract if the condition is unacceptable.
· Shorten time frames on necessary contingencies.
· Attach proof of funds for down payment or full purchase price if cash.
· Arrange bridge financing to be able to pay cash.
· Buyer should pay their own normal closing costs.
· Write a personal note to the seller explaining why you like and want their home. Some listing agents are advising sellers to not accept them due to potential discrimination liability.
· Escalation clause … offer to pay $X,000 more than highest acceptable offer up to a limit.
· If using a digital contract, change the font and color to distinguish the signature.
· Make your best offer first because they may not make a counteroffer.
When a new listing hits the market, it is commonplace for there to be a rush of interested buyers that result in multiple offers. It is prudent for you to research and consider which of these ideas you can implement before you find the home; it is much better to have more time to make these decisions, especially, if it involves a mortgage officer or an attorney.
Your real estate professional will be able to tell you if these suggestions are viable and may be able to offer additional recommendations.
If you do not have an agent, contact me at 661-510-5516 or email me at Realtor@CyndiLesinski.com to discuss a plan to craft your offer in the most favorable way possible, and to finally turn a house into a home, your home.
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“Turning Houses Into Homes”
Cyndi Lesinski and Associates
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