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When an ordinary human becomes a home buyer, suddenly you become filled with questions. How do I find a real estate agent? Which home is right for me? Once I find that home what can I do to make sure I get it? The home search can be exciting and nail biting all at the same time. As you pursue your home purchase, there are ways you can sweeten the offer on a home and set your offer apart from the competition.
The Home Buying Rollercoaster
When buying a home, many things happen quickly. Sometimes it feels too quick. Yet, other times, it feels like the home-buying process is moving too slowly. In addition, buying a home is generally an emotional process of questioning if this can be your future home and wondering what these next steps will really bring for you. Beyond that home buying is usually the biggest financial transaction of your life, which brings it’s on set of wonders and worries.
It’s essential to work with a professional real estate agent who you feel you trust and who has your best interest in mind. An experienced and knowledgeable agent can make all the difference in accepting the offer and navigating to a successful closing. Experienced Realtors have been through the process and are equipped with the skills and techniques to make home buying a success for you.
Putting together an offer strategy that meets the goals of both sides can be the difference between getting your desired home or losing it. Handling this step with attention and precision will have a huge impact on the process and the end result.
Discover Key Terms for the Seller
Believe it or not, the highest price offer is not always the winner. Receiving the highest possible price is not always the most essential item to the seller.
Because of this, it is critical to have a detailed discussion to discover what the seller cares most about. Talk to your agent and use the seller’s priorities to develop your offer strategy.
Finding out the key items of importance to the seller and crafting an offer accordingly can mean the difference between the buyer getting their offer accepted or not.
Pro tip: When an agent takes the time to discover what’s important to the seller and then follows through with an offer that includes these items, trust is already being built with the seller and their agent. This step alone can be the factor that sets your offer apart from others.
4 Key Priorities for Sellers
Rent Back Period
Does the seller need time after the close of escrow to move out? Many sellers need the funds from one home to buy the next home. Or they simply need time after the close to finalize their move. If this is a priority, you can submit a rent-back agreement to sweeten your offer on the home.
Home Inspection Contingencies
Oftentimes home inspections can reveal unexpected issues with a house.
Perhaps it is important for the seller not to be on the hook for any items discovered during the home inspection. Offering a lower-priced offer with an as-is guarantee could beat a higher-priced offer, if the seller doesn’t want to manage any home repairs after an inspection.
While it’s risky to take a house as-is, it could also be what sets your home offer apart.
Remove or Lessen Contingency Periods
Sellers may be more open to accepting an offer with fewer hurdles. These hurdles are also known as ‘contingencies of the sale”.
Contingencies generally favor the buyer and allow them a way out of the contract without risking their earnest money deposit. There are default contingency timelines included in a standard purchase and sale agreement. They can also be modified to fit the specific desires of buyer and seller.
Generally speaking, buyers seek longer contingency periods, while sellers seek shorter timelines. As a broker, I don’t recommend removing contingencies.
However, lessening the timeline is not an issue, assuming the necessary due diligence can occur within the specified timeline. Remember, it is essential to complete all due diligence and walk away if it does not feel right. Making a deal is not as important as the buyer being happy with the home for years to come.
Shortening contingency periods can make a seller feel more comfortable and represent the level of motivation the buyer is bringing to the table. Buyers wanting longer contingency periods do not show the seller they are confident in the deal.
Offer More Earnest Money
Generally speaking, buyers want to put forth the least amount of earnest money (aka the initial deposit). At the same time, sellers naturally want the maximum allowable amount.
The earnest money can also be loosely considered “skin in the game” on the buyer’s part.
Before you write the check for the earnest money, talk to your agent about the allowable amounts in your markets, as it is typically determined by state-specific contracts and specific laws.
Offering a higher earnest deposit or placing a portion of it in a ‘non-refundable” status from the time of offer acceptance can indicate to a seller just how serious the buyer is about completing the sale.
I will add a word of caution to the concept of making the earnest deposit “non-refundable”. Make sure you have comprehended and fully understand the risk of losing money by taking this step. If the deal does not work out for any reason (regardless of who may be at fault), your money will be given to the seller.
Tying it all together
At the end of the day, the most important thing for a buyer is to get the home they want to buy. Few things are more frustrating than losing out to a competing buyer for the home of your dreams, or any home for that matter.
There are multiple ways to “sweeten the offer” in an attempt to separate an offer from the competition. As a buyer make sure you trust and feel comfortable with the skill level of the real estate agent you choose to work with. This is (generally) the single largest financial decision a person makes in their lifetime, so handling it with great care is critical.
FastExpert gives you the resources to find a great agent you can trust. Let your agent go to work on your behalf to sweeten your offer on a home. Then get ready to move in!