When you are buying a house—especially in a fast-moving seller’s market like we have had in 2021—you have to make your purchase offer as competitive and attractive as possible. Home sellers may be receiving multiple offers, so you have to do what you can to make yours stand out.
Price vs. Terms
The first thing to remember is that the price is not the only factor that matters. Just because you offer the most money does not mean you will get the home. Today’s sellers (and their real estate agents) are very savvy and will look at all the details of each purchase offer. The terms of the offer are just as important—if not more—than the price itself. Sellers are looking for a smooth and stress-free closing with fewer complications and contingencies. They don’t want the process to drag on forever and they don’t want to take any unnecessary risks. If a buyer’s offer seems shaky or overly complex, they are more likely to pass on the deal.
When I am working as a buyer’s agent, I always like to talk with the seller’s agent before helping my buyers put together a competitive offer. This step helps me understand some of the needs, concerns and desires of the seller, so that the purchase offer can be tailored to make them feel confident about the home buyer I am representing.
Here are a few things I recommend when preparing a more attractive purchase offer:
1. Shorten the Length of Closing
Sometimes you are at the mercy of your lender or the escrow company, but try to shorten the length of the closing period. Paying all cash is one great way to do this, but that’s not feasible for everyone. Those buying with a mortgage loan will at least want to get pre-approved for their loan before they even start searching for a home. This will definitely help the final loan approval process go smoother and quicker. Plus, having a mortgage pre-approval letter in your offer is an absolute must-have in today’s competitive real estate market.
2. Allow More Time for Seller to Move
Though you can take steps to shorten the escrow/closing process, you may want to offer a little extra move-out time to the seller. Give them some leeway on the move-out date, so they aren’t feeling as rush once the transaction is closed. You don’t want to give them too much time because you have to plan your own move in, but a little extra time goes a long way.
3. Minimize Contingencies
Some of the biggest complications in the real estate closing process come when there are contingencies with the mortgage loan, home appraisal, home inspections and the sale of your current home. These issues can delay the escrow timeline and that’s something most sellers will want to avoid. Consider selling your current home first and renting for a little while before you start your new home search. Talk with your lender and buyer’s agent about other ways you can minimize your contingencies and shorten the closing period.
4. Make it Personal
One of the tips I almost always recommend to my buyers is for them to write a personal letter or record a brief introduction video that we can present to the seller along with the purchase offer. This approach can be very beneficial because real estate is usually a very emotional experience for them, too. Showing the seller who you are and why you would like to buy their house can often sway their decision to accept your offer.
Unfortunately, the sellers do have a lot more power in the current market where inventory is low and buyer demand is high. Some buyers are willing to give up a lot more than they should. You have to set your own expectations, be ready to act quickly and possibly be willing to make a few concessions to get the house you want. However, you have to be careful about giving up too much or getting yourself into a bad homeownership situation. Waiving home inspections or paying more than you can truly afford could severely come back to haunt you later. Be honest with your lender and your buyer’s agent, and listen to their advice to avoid any costly mistakes.
Watch my full video on this topic below:
If you are thinking about buying a home in the near future, you’ll want to start preparing as soon as possible so that you will be able to make better purchase offers when the time comes. Contact The Durkovic Group today to schedule a no-obligation introductory consultation to see if we’re the right fit for you. Even if you don’t end up hiring us, we’ll be glad to provide some free advice that will help you on your journey toward homeownership.