In today’s red-hot real estate market, where homes are listed and sold very quickly, it helps to have a game plan
going in. According to a recent Zillow Group Report survey, “15% of buyers said it was difficult or very difficult to get an offer accepted on a home they were interested in purchasing.”
The easy parts are finding the right home; getting a mortgage pre-approval, and asking your Realtor to provide neighborhood comps so you’ll know what comparable homes in the area are selling for. Then, working with your Realtor, you’ll decide what your offer will be. In a “normal” real estate market, you might make an offer that’s lower than the maximum price you’re able to pay because the seller will probably counter your offer.
However, in today’s market where homes are receiving multiple offers, you can make an offer at list price, with an Escalation Clause. An escalation clause states that you’re willing to pay a specific dollar amount over the seller’s next highest offer. Here’s an example from a recent Zillow article: “A home is listed for $250,000, with an escalation clause that says you’ll pay $1000 more than the highest offer, up to a maximum offer price of $260,000. Then if another buyer comes in at $255,000, you’ll automatically offer $256,000 to secure the deal, without going over the maximum amount you’re comfortable spending.”
Another action that can help your offer stand out is accommodating the seller’s timeline. Being flexible about the timeline may make the difference in your offer being accepted over another one. This is helpful when the sellers must close on the new home they’re buying in a certain time frame. Removing contingencies will also be music to any seller’s ears. Buyers can waive the home inspection (although I advise my buyers not to do so). If you’re paying in cash, you can also waive the appraisal.
Another contingency has to do with your offer being contingent on the sale of your own home. This may be necessary if the buyer needs the profit from that sale in order to afford the home they are trying to purchase. However, this makes an offer less attractive to a seller because they have no certainty that your home will sell in the timeline they require.
You might also put down more Earnest Money. If one offer comes in with $1000 in Earnest Money, and you come in with $5000, the seller will view you as a more serious and appealing buyer.
Finally, you could write a thoughtful letter to the seller explaining your situation and what you love about the house. This often makes the difference in your offer being accepted over another.
So there you go. Hope these tips result in an accepted offer on the home of your dreams.