The best offer always wins and how can you make your offer better?
In a highly competitive marketplace like real estate, the best offer always wins. Here are 3 tips to improve your offer when buying your next home.
Have a pre-approval letter from a bank or lender
Understand the seller’s timelines
Only go after contingencies that are the most important
It’s not what the buyer thinks the best offer is, it’s what the best offer is for the seller. We have to craft an offer that’s going to be what the sellers want to see.
The first critical thing you need to include in your offer is a pre-approval letter from a bank or lender. You don’t have to go get that before you look at a home, but just know that you have to be prepared to get it if you want to make a great offer.
An important distinction, we are not talking about a pre-qualification letter, but a pre-approval letter, which means:
They’ve seen your pay stubs
They’ve seen your tax returns
They’ve checked your credit
They’ve verified your employment
When you find that home, and right away you get a pre-approval letter and it means that you are a serious buyer that has already been verified. The listing agent will love that and the sellers are going to love that also. It means that they won’t be wasting their time on a potential buyer that is not qualified.
The second thing you need to understand is the seller’s timelines. Because most sellers are looking for the most money and the best terms. Some of the best terms you can give them in an offer is the closing date or possession date that works perfectly with their plans. Because the seller wants the least amount of hassle when uprooting their lives. So as a buyer, your agent needs to go out and ask questions to find what the seller wants in terms of the closing date and possession date. Don’t just pick something and think that’s going to work for the seller. That’s not going to win.
The third most important thing when it comes to improving the offer is your contingencies. Most notably the home inspection. We know the seller wants the most money, they want to sell on their timelines, and they want the least amount of hassles. So the more contingencies you put in your offer, the more hassle it will be for the seller.
The seller probably doesn’t want to do a bunch of repairs, right? So when sellers see the home inspection contingency, they’re thinking you’re going to call out every little thing that’s wrong with the home and the buyer is going to ask the sellers to repair everything.
Important: I’m not saying don’t get a home inspection. I recommend you always get a home inspection, but I want you to think about it, every time you make an offer, think about it. Because if it is a multiple offer situation and there’s another offer without a home inspection or an offer that says they’re not going to ask for any repairs, you’re probably going to lose out on that home. So my advice is that you just need to pick your battles. Is it worth it? What does my risk look like?
Those are the three ways to improve your offer, pre-approval letter, closing dates or possession dates, and a home inspection and contingencies.
Reach us with your real estate questions at www.nickmcleanrealestate.com