The real estate market swings on a pendulum, and right now its on the side for the seller, which means there’s a lot of people competing for a limited amount of inventory. When trying to purchase a home in this type of market, the buyer must consider what they’re willing to offer in terms of money, time and allowances before presenting a bid to the seller. Here are five tips to crafting an offer the sellers will want to accept.
- Show you’re pre-approved – Buyers can save a lot of time and headache by having a lender provide a pre-approval letter before the home search process begins in earnest. These letters take time, which is why its important to get it done as soon as possible. The letter will describe that the buyer’s credit rating has been reviewed and they can afford a home.
- Commit to earnest money – The more earnest money a buyer puts down can show the seller how serious they are to purchasing the home. A healthy deposit will range from three to five percent and will be applied to the final closing costs.
- Don’t be too demanding – In a seller’s market, the current home owner has the ability to sometimes choose from multiple offers, which makes it important identify what expenses the buyer is willing to accept versus asking the seller to cover them. For example, covering all closing costs will be appealing to a seller instead of asking for a 50/50 split.
- Make the first offer the best offer – The saying, “You only get one chance to make a first impression,” is true in real estate offers too. A buyer only has once chance to impress the seller and demonstrate how much they want the home. In a seller’s market, a lowball offer will not work. Before submitting an offer, buyers should know what they can afford and have a price in mind that they’re willing to pay for the property. Additionally, when markets are competitive sellers don’t need to offer allowances for carpet, paint, wallpaper removal, or other cosmetic features because there are plenty of people competing.
- Write a letter – It may sound odd, but buyers who write the seller a letter describing why they want the home can go a long way. For example, our agency recently had a client who accepted an offer nearly $20,000 less than the highest offer simply because the letter was so poignant. The buyer’s letter detailed how the home would help the family expand and build stronger ties. The details of the letter tugged at the seller, which ultimately got the buyer the home.