How To Put An Offer On A House: Enhancing The Offer
Real estate negotiations are often a tedious dance between buyers and sellers. In the current market, sellers hold a stronger position. Therefore you may find yourself putting an offer on a house along with many other hopeful candidates. Realtors refer to this as a multiple offer situation, and if you don’t have an experienced agent that is well-versed in negotiating, you may find yourself on the losing end of the stick.
When the time comes to submit an offer on a house you want to buy, the offer needs to be attractive, competitive, and improve the odds that your proposal will win over any other.
The competition is particularly intense where first-time buyers are concerned. Entry-level homes are always competitive territory.
A knowledgeable agent will help you understand local market dynamics. They can also provide you with a thorough analysis of a home’s list price so that you can make a competitive offer. However, you may be surprised that the price isn’t always the deciding factor.
Sellers care about multiple aspects of your offer. Your financial strength and the likelihood of the transaction closing, among other things, are equally important. We have a few tips on how to put an offer on the house, making it more attractive and strengthening your position as a buyer.
How To Put An Offer On A House:
1. Select A Strong Lender With A Good Track Record
Banks, mortgage brokers, and mortgage lenders can all fund mortgages. Therefore it pays to shop around to various lenders before making a final decision. You can always start by asking your buyer’s agent for recommendations. Realtors often know which lenders have the best and worst reputations based on their experience in processing applications and meeting closing deadlines.
Suppose a seller is considering two comparable offers, each with a different lender. The listing agent may encourage their client to choose the offer where a lender backs the buyer with a superior reputation. A reputable lender will improve your odds of having your offer accepted.
2. Have Your Loan Fully Approved Before Putting An Offer On A House
A pre-approval letter is different from a pre-qualification letter. A pre-approval letter means a lender has taken a serious look at your financial credentials and all supporting documents. But you may want to ask your lender to take it a step further and get your application into the underwriting process.
If you can present proof from your lender showing progress on your mortgage, the seller will have even more reason to choose your offer. You may also want to provide the seller with extra financial details. Proof of funds is not a requirement, but your willingness to share additional information can increase the seller’s confidence that your financials are solid.
3. Drop More Earnest Money
The seller agrees to what they believe is a reasonable good faith deposit. If you choose to deposit more earnest money than other buyers, you’ll signal that you are strongly committed to finalizing a sale. Earnest money is a good faith deposit and is usually applied to closing costs or the down payment. Therefore you aren’t paying more for the home; you’re putting more money in upfront, which may pay off for you in the end.
4. Be Flexible With Closing Dates
Sellers often prefer to close quickly and easily, but now and then, a seller will need to line up another purchase or find temporary housing before they can complete the sale. Buyers with the flexibility to close may take precedence in this situation by allowing the seller as little or as much time needed to get the deal done.
5. Streamline Inspections
You’ll want to feel confident about the home you’re purchasing. Ensuring there are no significant issues or extensive, costly repairs lurking in the dark is a necessity. That’s why the inspection contingency is in the purchase offer. Work toward making the contingency less problematic for the sellers. For example, shortening the inspection period or pre-scheduling your inspection and submitting it with your offer can add to its appeal.
6. Minimize Contingencies
It’s wise for buyers to reduce their demands down to the essentials in a seller’s market. Navigating an inspection clause is important, but asking a seller to delay closing until you’ve found a buyer for your current home will likely drop you from the competition altogether.
When it comes to contingencies, avoid requests that are off-putting, like asking them to contribute to closing costs, paying for a home warranty, asking for a paint allowance, or their patio furniture. Go for the must-haves or things that may be deal-breakers for you, but refrain from over asking.
7. Other Considerations When Putting An Offer On A House
Of course, you can always put yourself in a stronger negotiating position by putting more money on the table. You can also discuss the possibility of writing a letter to the seller with your Realtor. These types of letters appeal to the seller’s emotions and allow you to express your desire to purchase the home.
Living Houston Is Here For You
If you need guidance on how to put an offer on a house, the best place to start is with an experienced real estate agent. Our Broker and founder, Laura Weisman is master certified in negotiating and an expert in multiple offer situations. You can contact us through our website at LivingHouston.com, email us at firstname.lastname@example.org or call us at 281.915.8100.