Picture it: you’ve finally found the home that’s absolute perfection. Great square footage, well within your price range, close to your favorite coffee shop, and a low-maintenance yard. You can practically feel the keys in your hand. But wait. First you have to make an offer the seller can’t refuse. How do you master the home buyer art of making a knockout offer in a competitive market? Wyndham Capital Mortgage is here to school you.
How To Make Your Offer Stand Out in a Competitive Market
Connect With the Seller
Before you start digging up dirt on other buyers to get them to back off your dream house, you’ll be better off focusing that energy on the seller. Write a letter to the seller that lets her or him know why your offer is the one to choose. Start with what you specifically like about the house before moving on to what you like about the neighborhood.
Be sure to season your letter with a few personal details to make your offer even more appetizing. If the seller has lived in the home for a while, he or she is likely to have formed a deep connection with the property. Knowing the home will be “inherited” by someone who truly appreciates it can make your offer shoot to the top. To make the letter more personal, handwrite it and make sure it’s looked over for proper grammar and punctuation.
Move Quick on the Inspection
There’s a chance you might be dealing with a seller who wants to unload the home as quickly as possible. You may improve the chances of your offer’s acceptance if you can have the home inspected within five days, or you can have the home inspected before you submit an offer. Know that with the second option there’s a chance of you wasting money on the inspection if your offer isn’t accepted, so keep that in mind.
To even out your chances, you can include an “as is” inspection contingency.
What this does is lets you know the home’s current condition and lets the seller know you won’t ask for repairs to be done before buying. If it turns out the home does need repairs, you can either take care of them on your own or continue your house hunt.
Consider Non-Contingent Offers
In a competitive home buyer market, you might have to take the occasional risk. While it’s normal for a home purchase contract to have an appraisal and financing contingency, you can waive one or both to improve the chances of your offer’s acceptance. To be clear on the definition of financing and appraisal contingencies, what they mean is you can get your deposit back if you’re either unable to finance the property or if your appraisal fails to support the purchase price.
Removing the financing contingency essentially means you’re making a cash offer. With that in mind, it’s best you only consider this option if you can afford to do so. Make sure you’ve been fully approved and that you work with a lender who is familiar with this strategy.
As for the appraisal contingency, it’s usually a good option for buyers who are able to make a decent down payment and have a lot of cash in savings. There’s also a chance the listing already requires your offer be non-contingent on appraisal. What this breaks down to is that if the property doesn't appraise for the purchase price, the buyer is responsible for making up the difference in cash. This is because the lender will only finance according to the appraised value. Now do you understand why this option is better reserved for buyers with a surplus of cash?
It’s entirely possible to become a successful home buyer in a competitive market. Rather than buy harder, buy smarter.
Interested in more tips and tricks to help your home purchase go smoothly? Let us help!