Getting an Offer Accepted in a Sellers’ Market
So, you are ready to purchase a home and you have done all of the right things; hired a professional buyer’s agent, got your pre-approval letter, viewed some houses for comparisons and now it’s time to submit an offer.
Here are a few things that will help to make your offer stand out and get accepted by the seller. Your Realtor has the training, knowledge and experience to help make it happen and you should heed their advice.
Keep in mind, in a seller’s market; homes are selling at or above the asking price in many cases, especially foreclosures. The seller has no reason to accept a “low-ball” offer on their home, unless it was over-priced to begin with and has sat on the market for numerous days/weeks.
The days on market are a key indicator about the price of the home as well as having your Realtor run the comps for the areas recent sales. If a home has been on the market for an extended length of time, a savvy seller will reduce the price and keep reducing it until an acceptable offer is obtained. Your Realtor has the ability to view all of the pricing history within the MLS. (multiple listing service)
Everyone wants to get the best deal and the lowest price on their home purchase, which is simply human nature. But, you need to listen to your Realtor. He/she is the professional and deals with this stuff daily.
I cannot speak for everyone, but obviously, I can speak for myself. If I feel that a client is offering too much for a home, I will let them know. If I feel they are being too stingy and offering too low, I will let them know that as well. It has nothing to do with the commission; I do not take my commission into consideration when counseling a buyer on their offer. My focal point is merely helping my client purchase the home they desire. (Some buyers feel that if their Realtor is suggesting they make a higher priced offer, it is so the agent can get more commission. That is not the case with me)
Want to begin searching for your next home? Check out my website and let the fun begin!
I work with a lot of first time buyers and I get a lot of repeat business as well as referral business from these clients and that would not be the case if they felt that I did them wrong in any way.
Here are my suggestions and tips for getting your offer accepted by the seller.
- Make a reasonable offer after reviewing the comparables (known as comps)
- Submit a reasonable amount for the earnest money deposit. I typically suggest at least $500, but sometimes the seller requires a higher amount, possibly a $1000. If you are making an all cash offer, the seller (foreclosures) will almost always demand at least 10% of the final purchase price, so I suggest that you start out with 10% anyway. The higher your earnest money amount, the more serious you appear to be about completing the purchase and it will increase your chances of obtaining an acceptance of contract.
- Submit a copy of your mortgage pre-approval letter or POF (proof of funds) along with your offer.
- Do not request a bunch of personal items as they can be construed as financial deductions of your offering price.
- Give the seller ample time to review your offer, but do not be too generous with the time as it might allow for another offer from another buyer get into the competition ring with you.
- 10 days for home inspections and 5 days for negotiating any repairs. The more time that you request, the less desirable your offer appears to be. (seller will not want to risk having their home off of the market for an extended amount of time) (An all cash offer with no inspections is the absolute most powerful offer, especially when accompanied by a sizable earnest money check)
- Closing dates; cash offers can close in as little as a few weeks and often much less. Financed offers average about 3-6 weeks to close; ask your lender when preparing the offer. (The longer the closing date on the offer, the less desirable it might be) (One of the lenders that I do business with can close on an FHA or Conventional loan in 2 weeks or less. The buyer must be able to meet certain qualifications)
- If and when the seller counters your offer; respond quickly and precisely. If you take too long to respond, it could put you in danger of getting into a multiple offer situation if/when another offer has been presented to the seller.
- Make sure the contract is complete and submitted in its entirety. There should be no “blank” spaces on the paperwork. The cleaner and more complete your offer is to begin with, the better your chances of getting it accepted are.
So, after all of the hard work and the signing of the numerous documents, your offer is accepted. Now what?
If you are financing your home purchase, do NOT open any new credit cards, buy a new car, buy furniture or lawn equipment until AFTER you have closed on your home purchase.
Here are a few recent and true examples: A few days ago, I knew of another buyer that was within a few days of closing on their new home. They decided to open a Kohl’s charge account because they could receive 20% off of their first purchase. So, they bought a $6.00 pair of socks. This action cost them their new home. The credit pull dropped their FICO score by 45 points and knocked them out of eligibility for their home mortgage. Don’t make this same mistake!
Another buyer decided to try to buy a new lawn mower for their new home purchase. So, they applied for a Lowe’s credit card to purchase the mower a few days before the home was to close. The new credit pull dropped their credit score lower than the acceptable amount for the loan and they too lost their ability to complete the purchase of their new home.
(Lenders are required to pull your credit a day or so prior to your closing-this can be “do or die” for your home purchase)
Want to work with an experienced and knowledgeable professional buyer’s agent? Give me a call, I’ll be glad to help!