10 Creative Ways to Get Your Offer Accepted
Sometimes, you have to get a little creative to stand out in this busy market.
Over the past year, the real estate market has been so hot that it’s not unusual for homes to go off-market in days and the lack of inventory is to blame. When even homes that need serious work are breaking price records, it is easy to feel discouraged if you’re trying to buy right now. We get it!
Don’t give up, though. Getting your offer accepted isn’t necessarily about coming in with the biggest bag of money. It’s really about being able to anticipate what, exactly, the seller’s goals are and creating the offer that solves all of their problems. While your agent will weigh in with a strategy based on your specific part of the valley, there are a few common ways you can make your offer stand out. Whether you’re dealing with competition from investors or want to be sure you are making the best impression as a potential buyer, here are a few things that’ll increase your chances of a successful offer.
Hire an agent with connections
A large part of getting an offer accepted is the communication between your real estate agent and the seller's real estate agent. If your agent has connections or can communicate effectively, the deal is more likely to move forward. Your agent should be asking the seller's real estate agent what their client needs to get out of this deal. Is it the most money possible? Is it a specific timeframe, or do they need to rent the property back while searching for a new home? Knowing those needs and submitting an offer that meets them is vital.
Get in early
Staying in touch with your real estate agent pays off big. They’ll let you know as soon as homes enter the market, especially if they have many connections to other agents. Sometimes, agents will hear directly from other agents about a home that’s about to get listed — or that won’t enter the MLS at all (this is typically called a “pocket listing”). Regardless of how your real estate agent finds the home that fits your needs, be the first to book a showing and get ready to make an offer on the spot.
Be prepared to go over asking
In a seller’s market, it’s rare to find a bargain although that doesn't mean you aren't getting a good deal. While there are scenarios where you may end up successfully offering at or under-asking price (local market trends will inform your strategy), you can expect to offer a little more for the home you really love in most parts of the valley. This can be super hard emotionally, but be sure to ask your agent about appreciation rates, inventory levels, and what prices have been doing in the area you've been looking at so you can make an informed decision about your strategy.
Offer earnest money
Earnest money is a deposit made to the seller and held in escrow showing your earnest desire to proceed with the purchase of the property. It’s made after the seller accepts your offer and shows that you’re serious about buying. It’s not “extra” money because it’ll eventually be applied towards your deposit and/or closing costs but it is due as soon as your offer is accepted. The typical amount is 1% of the purchase price so you'll want to make sure this money will be ready if you’re offering it.
Write a letter to the sellers
When you make your offer, enclose a handwritten letter to the owners thanking them for their time in considering your bid. But don’t stop at a simple thank-you. This letter is about building a personal connection that normally isn’t made when sellers just look at a bunch of numbers. Expand on why you love the home and what caught your eye. If there’s a feature that sparked your interest, it’s an opportunity to build a personal connection. For example, a lovingly-tended garden or a kitchen with all the bells and whistles that a home cook would love. Above all, be honest and genuine.
If you’re open to the seller choosing the closing date, you may just get an edge over other offers, especially if the home just went on the market. Think of it this way, your sellers are probably also trying to find another home while selling theirs and more time might be exactly the stress reliever they need to choose your offer. If the seller is in this boat, the idea of having extra time may be worth more than the extra money another buyer is offering and they consider your offer a BETTER solution for them.
Nix the contingencies — when it makes sense to do so
A contingency is something that makes your offer conditional based on something else happening. The three most common contingencies in a buyer’s offer are loan, inspection, and appraisal. Making an offer contingent on getting a loan, an inspection with minimal issues, or appraising for the amount you’re offering, presents multiple opportunities for the transaction to fall through. If you’ve been pre-approved for a loan, the seller has had the property inspected by a reputable company, and you’re confident that the property won't appraise at a lower value, discuss with your agent whether or not you need these contingencies or how you could modify them to satisfy both your needs for protection and the seller's needs for a sure thing.
Beat out investor interest with a strategic offer
If you’re in an area that’s caught the attention of investors and flippers, don’t lose hope. Winning out over these types of offers is a matter of thinking of the downsides of accepting investor offers. For one, investors tend to offer all-cash but make lower offers because they’re offering cash. Second, they often want the property ASAP, forcing the seller to consider a quicker timeframe than they’d like. You can potentially beat investor offers by making an offer at the asking price (or slightly higher) and emphasizing flexibility on time frame. You can also highlight the emotional connection you have to the home over an investor who has no attachment and cancellation rates can be higher.
Consider an escalation clause
An escalation clause in your offer means you’ll increase your offer to a certain price if another offer comes in. It’s kind of similar to how, in an online auction, you can set a price limit, and bids will be entered automatically up until that point. This can be a risky thing — the seller may just counter offer your price maximum or raise the asking price entirely but it is a solution for helping the seller understand just how far you are willing to go to compete. For properties that have multiple offers on the table, this may be something to consider and your agent can guide you through the ins and outs of the strategy.
Make sure you have your ducks in a row
Ensuring that you have your paperwork sorted, earnest money put away, your downpayment funds ready to go, and your real estate agent ready to write an offer as soon as you find "the one" will make the entire process go as smoothly as possible.
One of the very first steps in the process is to get your pre-approval from a trusted lender who can also share with you many strategic lending options, appraisal gap strategies, and other options for competing with cash offers in today's market. The pre-approval form requires a rigorous process of reviewing your credit report and verifying pay stubs, bank statements, and other financial documents. If you pass underwriting requirements, the lender will give you the actual numbers for the loan you’ll be able to get once you find a home and then provide you with a letter to provide as proof.
Don’t ask for anything
Even if there’s a gorgeous chandelier you’ve spent years searching for, keep it out of your offer. The key to getting your offer accepted in a heated market is to present the easiest, stress-free scenario for a seller. While they may be open to including particular items in the sale, making requests before you've secured the home, may give the impression that there will be a lot of back-and-forth with the transaction. Once you are under contract, your agent can help guide you in making these types of requests and other contract negotiations that will follow.