10 Creative Ways to Get Your Offer Accepted
Sometimes, you have to get a little creative to stand out in this busy market.
Over the past year, the Central Ohio real estate market has been so hot that it’s not unusual for homes to go off-market in days. (The lack of inventory is to blame.) When even homes that need serious work are breaking price records, it is easy to feel discouraged if you’re trying to buy right now.
Don’t give up, though. Getting your offer accepted isn’t necessarily about coming in with the biggest bag of money (although it helps a lot). It’s really being able to anticipate what, exactly, the seller’s goals are and creating the offer that solves all of their problems. While your agent will weigh in with a strategy based on the local market, there are a few common ways you can make your offer stand out. Whether you’re dealing with competition from investors or want to be sure you are making the best impression as a potential buyer, here are a few things that’ll increase your chances of a successful offer.
Hire an agent with connections
A large part of getting an offer accepted is the communication between your real estate agent and the seller's real estate agent. If your agent has connections or can communicate effectively, the deal is more likely to move forward. Your agent should be asking the seller's real estate agent what their client needs to get out of this deal. Is it the most money possible? Is it a specific timeframe, or do they need to rent the property back while searching for a new home? Knowing those needs and submitting an offer that meets them is vital.
This year, I became President of the Greater Dublin Realty Association. My goal in this position is to network with as many like-minded real estate professionals in my community and to give back to the City of Dublin, and it's been a lot of fun. However, one unexpected bonus of this position is the level of respect other agents have for me because of this position. It's helped build trust with listing agents when I'm presenting offers on behalf of my clients.
Get in early
Staying in touch with your real estate agent pays off big. They’ll let you know as soon as homes enter the market, especially if they have many connections to other agents. Sometimes, agents will hear directly from other agents about a home that’s about to get listed (even though these "whisper listings" are frowned upon) — or that won’t enter the MLS at all (this is also called a “pocket listing”). Regardless of how your real estate agent finds the home that fits your needs, be the first to book a showing and get ready to make an offer on the spot.
Be prepared to go over asking
In a seller’s market, it’s rare to find a bargain. While there are scenarios where you may end up successfully offering under-asking price (local market trends will inform my strategy), expect to offer a more for the home you really love.
Offer earnest money
Earnest money is a cutely-named deposit that's usually held in an escrow account of the buyer's broker (depending on the instructions in the purchase contract). It’s made after the seller accepts your offer and shows that you’re serious about buying. It’s not “extra” money because it’ll eventually be applied towards your or closing costs. The typical amount is $500 - $5,000 and due within a few days of the seller accepting your offer, so make sure this money will be ready if you’re offering it.
Write a letter to the sellers
When you make your offer, enclose a handwritten letter to the owners thanking them for their time in considering your bid. But don’t stop at a simple thank-you. This letter is about building a personal connection that normally isn’t made when sellers just look at a bunch of numbers. Expand on why you love the home and what caught your eye. If there’s a feature that sparked your interest, it’s an opportunity to build a personal connection. For example, a lovingly-tended garden or a kitchen with all the bells and whistles that a home cook would love. Above all, be honest and genuine.
If you’re open to the seller choosing the closing date, and even allowing them to stay in the home for a little while after closing (post-closing possession) you may just get an edge over other offers, especially if the home just went on the market. Think of it this way: Sellers are also usually trying to find another home while selling theirs and may need more time. If the seller is in this boat, the idea of having extra time may be worth more than the extra money another buyer is offering.
A contingency is a clause in the purchase contract that must be met in order for the deal to close. The three biggest contingencies I see in Central Ohio are inspection, financing, and clear and marketable title.
As far as the inspection goes, forgoing a home inspection is a recipe for disaster (even when buying new construction). However, many buyers in this market are making offers contingency on satisfactory home inspections, but are waiving their right to negotiate any post-inspection remedy requests. This is something that a buyer should strongly consider in a multiple offer situation.
If you need to obtain a mortgage in order to purchase the home and you've made an offer at a price that the bank's appraiser can't justify when they do their appraisal, you'll want to have set aside an amount of cash that would make up for any difference between the purchase price and the appraised value. This is commonly referred to as "appraisal gap coverage."
A savvy real estate agent will be able to walk you through the rewards and risks of removing contingencies in any deal, so be sure you hire an experienced and knowledgeable agent.
Beat out investor interest with a strategic offer
If you’re in an area that’s caught the attention of investors and flippers, don’t lose hope. Winning out over these types of offers is a matter of thinking of the downsides of accepting investor offers. For one, investors tend to offer all-cash but make lower offers because they’re offering cash. Second, they often want the property ASAP, forcing the seller to consider a quicker timeframe than they’d like. You can potentially beat investor offers by making an offer at the asking price (or slightly higher) and emphasizing flexibility on time frame.
Consider an escalation clause
An escalation clause in your offer means you’ll increase your offer to a certain price if another offer comes in. (It’s kind of similar to how, in an online auction, you can set a price limit, and bids will be entered automatically until that point.) This can be a risky thing — the seller may just counteroffer your price maximum or raise the asking price entirely. For properties that have multiple offers on the table, this may be something to consider.
Make sure you have your ducks in a row
Ensuring that you have your paperwork sorted, earnest money put away, your downpayment funds ready to go, and your real estate agent ready to write an offer as soon as you find "the one" will make the entire process go as smoothly as possible.
The first types of offers that sellers will likely reject are ones from only pre-qualified buyers for a mortgage. Pre-qualification means that a mortgage company has really just taken a glance at your financials to give you a rough estimate on what the amount and interest rate would be. (Often, pre-qualification doesn’t even involve a credit check.) In a seller’s eyes, this means that a lot of things could sink the transaction.
Instead, get a pre-approval. This is a more rigorous process that will look at your credit report, verify pay stubs, bank statements, and other financial documents. If you pass their underwriting requirements, the lender will give you the actual numbers for the loan you’ll be able to get once you find a home (and then provide you with a letter to provide as proof).
If you’re very serious about getting your dream home, you may be able to get a pre-underwriting letter. This is a more thorough process that includes a thorough examination of financials and other documentation needed for a mortgage.
Don’t ask for anything
Even if there’s a gorgeous chandelier you’ve spent years searching for, keep it out of your offer. The key to getting your offer accepted in a heated market is to present the easiest, stress-free scenario for a seller. While they may be open to including particular items in the sale, making requests may give the impression that there will be a lot of back-and-forth with the transaction.