When it comes to making offers in a strong sellers market like we’re seeing in the Spring of 2016, it can be very discouraging for buyers. The key is to first and foremost stay positive and to secondly focus on what you can control. With this in mind I’ve put together a list of 3 things every buyer can do to ensure their offer has a higher probability of success. Obviously the offer price is the first thing a seller will look at, but in addition to the offer amount, theses three strategies may have a significant impact on your offer being accepted.
Close in under 30 days – For many sellers, this can have a huge impact on whether or not they entertain your offer depending on the circumstances. For example, if a seller is relocating and needs to sell quickly, this will definitely make your offer more attractive. Some lenders may not be able to get it done in less than 30 days so be sure to confirm how fast your lender can get it done before submitting an offer.
Work With A Reputable Lender – When a seller reviews your offer they want to ensure they are engaging with a strong and credit worthy buyer. If you are a cash buyer, then you will definitely have a leg up on the competition as long as the offer amount is competitive. But if you are going to be using financing, make sure you go with a lender that has a strong reputation for getting deals closed on schedule. One of the fastest ways to lose out a home is by working with a “bad” or unknown lender. For example Bank of America has one of the worst reputations for delaying closings or denying borrowers after weeks or months waiting for a response. When the market was booming back in 2006, I had a client that had an approval with ‘Dream Loans Yes.com’. That was actually the lender’s name on the pre-approval. Needless to say, the buyer struggled to get an offer accepted. Most established agents advise their sellers against entertaining offers from unknown and fly by night lenders.
Put Down A Higher Deposit – Another aspect of your offer that can make it appear stronger is if you are able to put down a larger deposit. A buyer putting down 20% looks a lot stronger than a buyer putting down 3%. While it may not be feasible for you to put down 20%, a 10% down payment can help increase the strength of your offer as well.
In addition to these three strategies, you may also consider waiving your inspection and financing contingencies, but this should only be consider by experienced home buyers. While this can really boost your odds of getting an offer accepted, it could cost you your down payment or put you in a situation where the home you purchase requires more work than you are able afford.