How to Create a Hard-To-Say-No-To Offer For a House

Imagine that you find a house you are ready to purchase. You tell your realtor to prepare the contract, sign it and voila! -the house is yours. If only it was that easy… In reality, there are other potential buyers. As competitive offers are quickly stacking up, you worry that the house will slip right through your fingers. But there is no need to start losing hope. We have compiled numerous tips that will help make your offer stand out from the rest.

PREQUALIFICATION VS PREAPPROVAL

Become prequalified, or better yet preapproved for a loan. Prequalification means that the lender checked your credit, income, and assets, but hasn’t committed to giving you loan. Preapproval is more valuable (although still doesn’t guarantee a loan). It means that you indeed do have the funds available for the transaction. You can also make an appealing cash offer for the house-in this case you won’t need to get preapproved but will need to provide proof of funds (bank statements). 

RIGHT REALTOR, RIGHT HOUSE

Be picky when choosing your realtor as buying a house is likely going to be the biggest purchase of your life. Hire someone knowledgeable of the market, especially the local area. Your realtor will help you put together the best offer. Ask your realtor for a comparative market analysis, which determines home’s value. Before you even start creating an offer, be absolutely sure that this is the house you want to end up in. You don’t want to waste your time and energy on the buying process and regret it later. Can your realtor help you find even better house in your budget or is this the one to fight for? 

WRITE YOUR BEST OFFER

Present respectable offer that will catch the eye of the seller. Don’t offend by lowballing but at the same time avoid overpaying. It’s always a good idea to offer a little bit over listing price but try to leave some reserve in your budget in case the interest rate increases, or the seller comes back at you with a counteroffer. Price is not always the deal-maker. Use your agent to regularly get in touch with the seller’s agent to find out seller’s priorities and monitor the selling progress. 

WHAT WILL HELP SEAL THE DEAL

• Submit large earnest money deposit. It is money you will pay for the house later anyway. Ask you realtor what a good amount would be. 
• Shorten or waive some contingencies-ask your agent what a good option would be. Some examples are: 
  • Shorten financing period 
  • Shorten option period and offer highest option fee. By paying option fee, you are buying a “window” during which you have the right to terminate the contract for any reason. Make sure you have enough time to get home inspection report done. Consult your realtor what would be a good amount. 
  • Appraisal Waiver-shows seller that you are committed to pay the price regardless of the appraiser’s opinion of the value of the house. But remember-if the appraised value of the house is less than the listing price, your loan will reflect that, and you will have to come up with the money to cover for the difference 
• Add an escalation clause. It means you are willing to pay more money than other buyers while staying within your budget
• Pay a fee that is customarily covered by the seller, e.g., closing costs, escrow fees, title policies… Ask your realtor, which costs they would recommend paying for. 
• Leaseback-if seller needs to live in the house after closing, offer them to stay and collect rent
• Write a letter to the seller. Tell them why you fell in love with this house and describe your background-mention anything you believe might win them over. Sometimes a simple mention of being a military family might speak to their heart. 

Create your best offer and you won’t have to stress during the home-buying process because you will know you covered all your bases. If somebody else tops your offer, don’t throw in the towel just yet. All sales aren’t final until they are. It is not uncommon for a sale to fall through during the closing process. While the sale is pending, seller might be open to accepting back-up offers. The only drawback of creating a back-up offer is that you won’t be able to make an offer on another house. Waiting to see how the sale goes for the prospective buyer could cause you missing out on another desirable house.

Written by: Andrea Marks

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