Make an Offer That Sellers Can't Refuse

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With shrinking inventories, many buyers are finding only competitive offers will win them the house they want.  Listed below are several ways that home buyers can make more competitive “irresistible” offers.

  1. Be pre-approved: Develop a strategy with your loan consultant.  They will help you review your credit reports to make sure they are accurate.  They can also advise you on short-term steps to improve your credit score.  Then you will be ready to take the next step and get preapproval.   The preapproval letter will show sellers you are a serious buyer.
  2. Don’t lowball: You may only get one chance to get the home you want in a competitive market. You may not get a second try to sweeten the deal later, so a lowball offer the first time around could cause you to lose out. Use sales prices of comparable properties in the neighborhood to submit your best offer the first time around.   Your realtor can provide a Comparative Market Analysis for the property you are considering buying.
  3. Consider an escalator clause: These purchase contract clauses are becoming more popular again. This is when a buyer agrees to increase their offer if there’s a higher bid from another buyer. 
  4. Add earnest money: The extra deposit can show sellers how serious you are.  Some buyers may even double the amount that the seller requests to show their commitment in purchasing the home. 
  5. Keep contingencies to a minimum: Sellers prefer no contingencies, but buyers want to protect their interests too.   Some options are 1) to offset a financing contingency with a preapproval letter and a strong earnest money deposit; and 2) if you have enough cash, temper an appraisal contingency by assuring sellers that if the appraisal comes in lower than the purchase price, you'll pay the difference or split it with them (up to a certain amount).
  6. Write a letter: Personal love letters about the home addressed to the sellers are winning over some hearts lately. The letters tell the seller about yourself  (e.g. “We’re relocating from ...”) and what drew you to the home (e.g. “We especially love ...”). 
So keep the above strategies in mind when presenting an offer to a seller.  It may make the difference between getting the home of your dreams or not.

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