tips to make a competitive offer
MAKE YOUR BEST OFFER FIRST The seller’ s market is not the place for making low offers and hoping someone will accept it. You will have to make your offer strong enough to beat out a multiple-bid situation. Consider a higher purchase price with no closing costs paid by the seller. Many homes are going over the asking price in today’ s market.
HIGH EARNEST MONEY Market standard is normally 1 % of the offer price but in today’ s environment, at least 2 %( or more) is suggested to demonstrate your commitment. This will be applied toward the purchase price as part of your down payment at closing.
USE OPTION MONEY This is when a buyer pays money directly to the seller. It is non-refundable if the buyer defaults or terminates. Option money will be credited back to the buyer at closing and listed on the settlement statement when the Buyer closes.
FINANCING A preapproval letter is a stronger sign of what you can afford and adds more credibility to your offer than a prequalification letter. This helps to create more certainty thanks to proof from your lender. Use a lender with a good reputation to make the offer even stronger. A high down payment with a local lender is more favorable and having your lender call the listing agent to emphasize your qualifications sets your offer apart. It’ s best to eliminate a financing contingency by going through preliminary underwriting prior to making an offer.
MAKE A CASH OFFER These offers are often more attractive to sellers, as they mean no buyer financing fall-through risk and, usually, a faster closing time.
SUBMIT A CLEAN OFFER A clean offer is one with as few terms, stipulations, and contingencies as possible, preferably none. It refers to an agreement that requires very little from the seller.