6 Ways to Write an Offer a Seller Can’t Refuse
Have your heart set on a particular home? There’s more than money involved in making sure your bid wins. In real estate, money isn’t everything. Buyers with the biggest offers don’t always prevail. Here are 6 steps to ‘yes’
1. Hire a skilled negotiator.
Your secret weapon against such competition is an experienced, well-trained real-estate agent. Buyers who don’t use an agent “are shorting themselves the knowledge and experience,”
2. Get pre-approved for a mortgage.
Before you make an offer, get approved for a loan. This gives you almost as much power as a buyer with cash. “If they know you have a loan commitment in place, they’ll treat you as a very serious buyer, even if your initial bid comes in below what they were expecting.
3. Learn all you can about the seller.
“If we want make an offer that a seller is going to be attracted to, we have to understand what is important to the sellers.
4. Make concessions up front.
Armed with whatever you’ve learned about the sellers. Decide how to neutralize each objection and make life easier for the seller. Make a “clean offer,“ Buyers frequently ask sellers for help paying their closing costs. Make a “clean” offer with no request for help. Include an automatic escalation clause, In a competitive market, offer to automatically increase your offer by a specified amount – say, $500 — over the highest bid. You can put a limit on how high you’ll go or not. Be sure your offer requires the seller to show you any other offers in writing.
- Time: When sellers want to move quickly, jump, if you can. Sellers often are grateful to save a mortgage payment, storage costs or rent on interim storage or accommodations. Or, if sellers need to wait until a new home is free, or because they need time to pack, let children finish school or say goodbye to friends, offer to delay your move-in date. You can always charge rent. You can also use this tactic in reverse to get your own needs met:
- Earnest money: The (refundable) deposit for $2,000 or $3,000 that you attach to a bid to bind the offer is called “earnest money.” “The bigger the deposit, the more serious you are.” To make a good impression, offer more, up to 10% of the purchase price. To further sweeten the deal, make part or all of the deposit non-refundable after the home has passed inspection, to demonstrate that you want to stay in the deal.
- Accelerate the deal: A purchase offer is typically contingent on certain milestones that are set by state law: The buyer has a certain number of days to get financing and an appraisal, the seller has a time frame to have an inspection done. Where the law allows it, you can shorten or eliminate deadlines to raise your offer’s appeal.
- Waive the appraisal: Appraisals have become a source of anxiety for sellers, and deals often fall apart because the appraiser finds the home is not worth the purchase price that the buyer and seller have agreed on. Banks will only loan you a percentage of the home’s appraised value. But, if you’re able, you can include in your offer the promise to pay any difference in cash — up to, say, $5,000 over the appraised value.
- Waive the inspection: Here’s how this enticement works: Some sellers will take a lower price if you offer to buy the house “as is.” You, however, reserve the right to back out of the deal if you don’t like what the inspection turns up. Some sellers love this because it allows them to close quickly, free of the cost and burden of correcting unforeseen problems.
- Wave money: Never underestimate the sweetening effect of money. Offering the full list price or more is the traditional way of getting a seller’s attention.
- Wave cash: If you’ve got the wherewithal, offer to pay in cash. For a seller, cash signals your financial solidity and promises a quick closing and no waiting for you to get financing.
5. Write a love letter to the sellers.
When you really want a place, you’ll go to some special lengths. “Sellers care deeply,” when you explain with sincerity what owning their home would mean to you, who you are and how you envision your life there.
6. Get your offer presented in person.
Finally, the expert sales trainers say your offer has a far better chance when your agent presents it to the sellers in person. Not all agents will do this. And not all sellers’ agents will let them. But, as a buyer, you can sure try. Start by asking, when you’re interviewing agents, “Are you going to present my offer in person to the seller?”
This article was taken from MLS.com Real Estate.
