Tuesday, May 13, 2014

How to Get Your Offer Accepted in a Tough Seller's Market!

What a turn of events we’ve had in the past two years with the inventory of homes for sale extremely low and home buyers returning to the market with determination.  Homes in popular locations are selling in just a few days and often with multiple offers.  This uneven supply and demand has left many home buyers stuck in a perpetual search. 

So, what do you do?

For starters, recognize it’s a seller’s market and that you’re probably not going to get the deal of the century.  This doesn’t mean you’ll need to “over-pay” for your home, but you will need to pay a fair market price and get a few things in order ahead of time more than ever.
Remember, if a house is priced correctly and popular with other buyers, the Seller will likely feel confident and scuff off anything short of what they want (and in the back of their mind they’re hoping for even more). 

Here are a few tips to get your offer accepted:

Get Pre-Approved with a Known and Respected Lender.  Don’t pick an unknown lender or an online source.  The listing agent will likely discredit your offer to the Seller.  Get yourself “Underwriter Approved” to put your offer above others.  This extra step will compete well with cash offers and demonstrate you’re organized, proactive, and ready to close escrow.  Have your lender call the listing agent immediately after you make an offer to assure them you are a solid buyer and answer any questions they have.

Get Some Experienced Help.  Find an experienced full-time Real Estate Broker who will work hard for you.  It can take a real dedication and effort to get your offer accepted.  The last seller’s market ended in 2007 – so you will likely do better with a Broker who has at least 7 years experience.

Gain Some Knowledge.  Get REALLY familiar with the area you want to buy and what homes are selling for (not the asking prices).  Take your time and have some fun.  The knowledge you acquire = an advantage above others.  Build your confidence so when you find “your” home, you can make a quick decision and write a smart offer.  Remember, there is no exact formula to pricing a home.  With the help of your Broker, establish a reasonable “price-range.”  If the house has multiple offers, put your best foot forward at the top of your range.  Your Broker should advise you of what a safe price range should be so you don’t “over-pay.”

Think like the Seller.  Find out why the house is for sale.  Knowing what’s motivating the Seller will help you write an offer they’ll want to accept.  An experienced Broker will know how to extract this from the listing agent.

Write a Clean Offer.  Focus on the big picture.  Don’t lose the deal by clouding the offer with things like home warranties or other annoying little fees for the Seller to pay.  These were acceptable a couple years ago, but there are plenty of buyers now that are making offers without these things.
Include a Relatively Large Earnest Money Deposit.  Show the Seller you are serious.  You’ll have many opportunities to get the deposit back if you don’t buy the house.  Talk with your Broker about the risks.  If you are competing for the house, your earnest money deposit should be at least $5,000 ($10,000 will likely to beat the competition).

Include a Fast Close.  Be willing to close as fast as you can.  Don’t cut yourself short on home inspections, but do have your loan application “Underwriter Approved.”  This should speed things up.  Write your offer to Close in 4 weeks (7-10 days if you’re paying with all cash).

Hand-Deliver the Offer.  The art of hand-delivering an offer has largely been lost.  Have your Broker shock the listing agent by making a face-to-face visit when presenting your offer.  This little effort is amazingly powerful.  The Seller is not only picking a buyer to work with but also a buyer’s agent.  The more professional you and your Broker come off the greater the chance for success.  Your Broker can take the time to tell a story about you, dispel any concerns the listing agent and sellers might have, leave them feeling confident you’re interested in the house, and ensure everyone that things will go smoothly.

Follow Up.  Your agent and your lender have done a great job of presenting your offer, and you're feeling good about your chances.  Make sure your Broker calls to follow up politely on the status of your offer.  I prefer calls over email because it shows more dedication.  This is when your lender should call the listing agent as mentioned earlier.

Take a Back-Up Position if Offered.  If your offer isn't accepted, and the Seller asks you to be in a back-up position, take it.  There is no risk to you as you can unilaterally cancel at any time, and keep looking in the meantime.  There are many reasons a home sale doesn't work out that are unrelated to the condition of the house.  I have helped many buyers get the home they wanted with just a little extra effort.

Offer Accepted.  Congratulations.  It didn't happen witout a considerable effort. Thank your Broker, your Lender, and Yourself for a job well done.  Entrust your Broker to get the busy work done, and leave the important decisions to you.  Call or email me for a flowchart outlining the major steps to buying a home.   Have some fun!

Please call me when it's time to buy or sell a home.  I'll work hard for you.
Darin Provost, Broker
Vintage Real Estate

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