Here are some offer strategies:
1. Competitive purchase price: Coming in strong with purchase price is very important if you are offering on a home in a multiple-offer situation or if this is a home that you really want and can see yourself in for quite some time. Of course, if the home has been sitting more than the average amount for that zipcode you may have a little wiggle room or a lot of wiggle room but your realtor should be doing a market analysis on every home you are going to be submitting an offer on.
2. Seller love letter: Write a letter to the seller explaining all the things you love about the house and how you see yourselves growing there. Now sometimes these are not being accepted for have your realtor check in with the listing agent before wasting your time.
3. Shorter Inspection Period or waived inspection: A lot of buyers are doing pre-inspections in a competitive market which is an inspection before an offer so that they can then waive inspection. Other buyers are waiving inspections completely which looks strong to the seller because they know there are fewer contingencies for the deal to fall through. Some buyers are also doing a short inspection period meaning getting the inspection done in 1-3 days in order to put the seller at ease so that they will not have to keep the home off the market too long should they not like how much is asked for during the inspection period. Every situation and listing is different. This blog is for a competitive market however, if you are working in a slower market pace you will want to take advantage of the inspection contingency period.
4. Paying your own closing costs: Any amount of money you ask the seller to cover for you, whether that be purchase price, concessions, or repairs is money being taken away from their net proceeds. So if you plan to come in strong and help the seller bet the most amount of money, putting your best foot forward to win the dream house or investment property, you will most likely want to pay your own closing costs. Keep in mind the seller has about 3 times the amount of closing costs than you do as the buyer.
5. Large down payment: Putting more money down looks strong on financing and of course, some buyers are paying cash which usually means no inspection or appraisal asked for. However again, your realtor should be guiding you on what’s needed. I’m a slower market with homes sitting for longer a simple 5-10% down should suffice.
6. Larger than 1% of earnest money: 1% of the purchase price should really be your minimum amount for earnest money. Remember earnest money is the buyer putting some money on the line and telling the seller that pulling the house off the market to pending is actually going to be worth their time. Earnest money is the buyer’s good faith that they are going to do their best to purchase the home. You get this money back if you are within your inspection contingency period, or if the appraisal terms cannot get worked out.
7. Additional down: In a competitive multiple offer market sometimes homes are going for over what they will appraise for. When this happens it is very common for buyers to add in what’s called an additional down payment in order to cover the difference of the offer price and the potential appraised value. This strategy is specifically used in multiple offer scenarios in a fast-paced market where packing a punch is the only way to secure the top position offer.
Each market is different so please chat with your realtor during your buyer’s consultation on what the market is doing right now. Andddd…be sure that they are writing you up a market analysis on the home you are interested in and going through it with you before offering. Remember the list price is a price the seller and or listing agent came up with. You hired an agent to represent you and advocate for your biggest financial purchase so they need to help you do your own research in regards to price.
