In the competitive environment that we find ourselves in today, make your real estate purchase offer stand out. Inventory levels of residential homes for sale are at an all-time low with absorption rates in most price ranges, way down. Many sellers are now entertaining multiple offers on their properties and can afford to be choosy.
To help you get that perfect home, here are eight tips to consider when drawing up your agreement:
- Offer what the home is worth – Get real! Too many buyers lose out on the home that they really want because they’re trying to squeeze every last nickle out of the seller and get a deal. The days of low-balling sellers are over. Inventory levels are too tight. Have your agent run a Competitive Market Analysis (CMA) on the property prior to making an offer and use that information to structure a competitive agreement.
- Show the seller you’re serious with a substantial deposit – If you were a seller considering multiple offers at the same time and they were all relatively close in price and terms except for the deposit, which one would you choose? Agreements with paltry $500 deposits get trampled. Agreements with deposits that are 5-10% of the purchase price shine.
- Find out what the seller’s preference is for a settlement date – Selling a property is stressful. In most cases, the sellers are moving to another property. If it’s new construction, their property may not be ready for a couple of months. Find out when the seller can move comfortably and, if possible, structure your agreement to allow them time to move.
- Don’t ask for everything but the kitchen sink – It’s normal to ask a seller to leave the range, dishwasher, and microwave. Sellers expect those requests. But when you start asking for the flat screen TV, dining room hutch, and the oriental area rug, your adding little irritants for the seller to turn you down.
- Seller assistance erodes their bottom line – If you’re a first-time home buyer and short on cash, you might not have any choice but to ask the seller to pay for some (or all) of your closing costs. But if you’re a well-qualified buyer and not strapped for cash, consider not asking for any seller closing cost assistance. Some basic math here – – – a $200,000 offer with $8,000 in seller assistance means that your offer is $192,000. It’s the net dummy.
- Inspect the property but be reasonable – Most offers made by buyers today come with at least a Whole House Inspection contingency that allows the buyer to walk away from the agreement if there are issues that cannot be resolved with the seller. Some other inspections may also be warranted depending upon the type of financing being pursued. Try to do as much due diligence ahead of time so that you don’t have to clutter up an agreement with a contingency like Uncle Harry approving the property.
- Make sure a reputable lender has pre-qualified you for financing – Invest a half hour of your time with a lender and get pre-qualified for a mortgage; preferably one that has a well-established reputation within the community. Most lenders will issue you a pre-qualification letter to accompany your offer so the seller knows that you have a resonable chance of obtaining a mortgage. Pre-qualification letters from Third Rock From the Sun Savings and Loan are a little suspect.
- Give it a personal touch – Sometimes the difference between offers is so narrow that it comes down to whom the seller likes better. Consider submitting a personal note or letter with your offer letting the seller know how much you love their home and thank them for considering your offer. Click here for tips on writing the letter. Let them know that your 5 year old daughter loves the swing set in the back yard.
Good luck and happy house-hunting!