Creating A Strong Offer For Your Next Home
After walking through the most beautiful house you’ve ever seen, you may just stop thinking about it and can’t wait to own it and make it your living space. You’ve spoken to your friends and family about it and everyone is excited. However, there’s one major problem lurking in the shadows – you aren’t the only one obsessed with turning that house into a home. There are other bidders you are not aware of and who may be offering the seller better options. As we go further, you’ll learn how to craft a strong offer for your next home.
Offer to pay in Cash
Generally, sellers prefer cash offers as they eliminate the stress of dealing with banks, reduces closing costs, and shortens the closing process. Furthermore, a cash offer is more reassuring to sellers as they know you do not need a loan to pay up their money. Sellers also prefer them because they are excellent for solving financial problems that may have caused the seller to put the property on the market in the first place.
Give few contingencies
Nobody likes too many extra clauses. The average seller prefers a buyer who has fewer contingencies. More contingencies mean it’ll take a longer time to close and may also mean more expenses for the seller. Therefore, even if your monetary offer isn’t as high as that of other bidders, the seller may choose you for this reason.
Offer a higher Earnest Money Deposit
The earnest money deposit known as goodwill money is about 1% to 3% of the cost of the home. A buyer deposits it into an escrow account to show the seller they are interested in the property. If the sale pulls through, it’ll serve as a part of the down payment for the home. The higher your EMD, the more serious the seller will take you. In addition to this, the seller knows you will not want to back out on the deal for a flimsy reason as you’ll lose all that money.
Write the seller a personal letter
Emotions have a role to play in nearly all aspects of our lives. From the little decisions, we make like what clothes to wear to big decisions like to whom to sell our cherished property. Sellers are no different. After living(owning) in a home for a while, they have developed a sentimental attachment to it and will find it hard to part ways. Sending such a seller a personal letter telling them how much you love their home and your plans on cherishing it will evoke the right emotions in them. It’s even better if you can point out specific aspects of the home that catches your interest and for what reason.
Get Pre-approved for a mortgage
Getting pre-approved for a mortgage means you are eligible to take a loan to buy a home. You can only get pre-approval if a background check on your financial history shows you are can take a loan. It shows you have a current source of income, are currently employed, and have a low debt-to-income ratio. Attaching your pre-approval letter to your offer shows the seller you are capable of paying your monthly mortgage, and they can trust you with their home.
Make Compromises that favor the seller
As a buyer, it is easy to focus on what you want without considering what will make the seller happy. A brilliant way to craft a strong offer for your next home is to make room for compromise. Give the seller a few extra days after the closing to move out of the property. It gives them time to sort themselves out. The more compromises you are comfortable making in your offer, the higher your chances of getting picked by the buyer.
Be ready to negotiate
Knowing how to negotiate is a great way to place yourself in the seller’s good books. That is why you need to work with a seasoned real estate agent to guide you through the process. Such an agent will let you know that your offer shouldn’t be too high as you may end up paying far more than the property is worth. It shouldn’t also be so low that the seller considers you a clown. Therefore, it should be within the range of the cost of the property so that you have room to negotiate if the seller gives you a counteroffer. The better your negotiating skill, the higher your chances of securing that home.
Outbid the other bidders
It’s not uncommon to see buyers who want a house so bad that they are willing to do anything to get it. Sellers are well are of this and will like to use it to their advantage. Ask your agent to get as much information from the seller’s agent as possible about the other bidders. If you can afford to outbid them, tell the seller you are willing to add $1000 to $1500 to the amount the highest bidder is willing to pay. Although money isn’t the only factor involved in the sale of a home, it sure is a good reason to sell one.
Find out why they want to sell the home
Ask your agent to find out why they want to sell their home and use that knowledge to your advantage. If the seller is in the divorce process, it means they need urgent money. If the seller wants to buy another home, they’ll need to sell this one as soon as possible so as not to deal with two mortgage payments. If the seller is an empty nester, they may be selling the house because it’s too big now. Put all these factors into consideration while making your offer, and you may end up paying less than you expected for the home.
Making an offer can be a daunting task when many other bidders are drooling over the same home. However, a strong offer not only appeals to the senses of a seller, but it holds them spellbound and makes you the right buyer for their home.