Seller’s markets are difficult to navigate for people trying to buy a home. If the real estate market favors sellers in your location, it is essential to hire a real estate agent to be your advocate in the process. In a seller’s market, a successful home offer needs to be competitive, straightforward, and clean. Here are 5 tips to help get your offer accepted.
A Successful Cash Home Offer
The top way to make an attractive offer is to pay in cash and keep lenders out of the deal. If you have the means to do this, you’ll have a big advantage over other buyers. You’ll have to show proof that you have the full amount of the offer in your account. Keep in mind that there will be more expenses than what you pay for the home. Lawyers’ fees, home inspections, and closing costs all add up. Don’t offer all the money you have with none left over for the other costs of homeownership.
If That’s Not Possible, Offer a Large Down Payment
It’s not common or expected to have the full amount of a house available as cash. In most cases, you’ll need to get a mortgage for at least some of the home cost. Offer as high of a down payment as you can to make the offer more attractive to the seller. A typical down payment is 20% of the price of the home, so bring that percentage up as much as you can afford.
More Earnest Cash
Earnest cash is the initial deposit that you put down when making an offer that you won’t get back if the deal falls through. 1-3% is a normal percentage for earnest cash. Offer a higher amount of earnest cash to get the seller’s attention. This shows them that you are serious. Only use this tip if you feel very confident about the condition of the home, and still order a home inspection.
Waive the Appraisal Contingency
There are several different contingencies that are standard in a home offer, like an inspection contingency and an appraisal contingency. The inspection contingency gives you a way out or renegotiation power if the inspection reveals serious problems. Never waive this contingency in your offer. The appraisal contingency offers flexibility if the home does not appraise as expected, which will lower the amount the mortgage company is willing to fund. If you have ample cash to cover a potential difference in the offer price and a lower appraisal, waiving the appraisal contingency may be an option for you. It gives the seller more peace of mind that the deal is less likely to fall through.
A Successful Home Offer: Keep it Simple
Sellers appreciate a simple and straightforward offer. Keep it clean by minimizing contingencies and special requests. Use clear language and avoid extraneous legal jargon. A good real estate agent knows how to write up an offer that is simple and uncomplicated.