The U.S. housing market is still humming along, which means that home sellers in many regions are still getting multiple offers. For home buyers, this means putting your best foot forward if you want to make your offer stand out from the rest.
6 Ways to Make Your Offer Stand Out from the Rest
- Walk in with home loan pre-approval to make your offer stand out from the rest.
Nothing says “I’m serious” about buying a home than having completed the mortgage pre-approval process ahead of time. When your offer includes a pre-approval letter from your mortgage lender, home sellers know that you are ready, willing and able to make the deal go through.
Conversely, home buyers who haven’t completed the full pre-approval process (even if they have been pre-qualified) may make an offer that their lender ultimately won’t agree to. This can easily send the home seller back to square one and may even cause a home buyer to forfeit their earnest money deposit.
|Comparing Pre-Qualified vs. Pre-Approved Home Buyers|
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You can see how much more “ready” home buyers who have been pre-approved for a home loan are vs. those who have only been pre-qualified or who have not even contacted their lender yet. If you’re working with a real estate agent but haven’t yet chosen a lender, your realtor could point you to a mortgage company they have experience with, who can help you get the pre-approval process completed before you make an offer.
- Put down a serious earnest money deposit.
The very definition of “earnest” includes the idea of being transparent, genuine and serious about something!
earnest – adjective – characterized by or proceeding from an intense and serious state of mind
When used as a noun, it is also defined as a considerable or impressive degree or amount. In a slow home-buying market, buyers can make small earnest money deposits. In a hot market or seller’s market – not so much. Putting down a high earnest money deposit tells home sellers that you’re serious about their property. It sends a message that you’re not holding back in order to make multiple offers on different properties (homebuyinginstitute.com).
Your real estate agent can advise you about how to make your earnest money deposit as competitive as possible, and about how to make your offer as a whole as competitive as it can be.
- Connect emotionally to make your offer stand out from the rest.
It’s common for home sellers to receive letters from buyers who are especially interested in “winning” when it comes to a multiple-offer bidding war. Tell the homeowner why this property matters so much to you, what makes it special to you, how you can see yourself living there.
When touring the home, you might have even seen belongings in the home that give you an idea of the home seller’s future aspirations or something in their past that you might share. Put it in the letter! Give the seller reasons to prefer your offer in a multiple offer bidding war scenario.
- Include an escalation offer.
In a situation where you know there are multiple offers, you can include an escalation offer in your bid. This tells the seller exactly how much you are willing (and able) to pay for the home. An example of this would be to offer $2,000 more than the highest offer submitted up to the limit you feel comfortable with. If you make an offer on a home that is listed for significantly less than amount for which your mortgage lender pre-approved you, you have some room to include an escalation offer in your bid.
Bear in mind, though, that the home’s appraisal may be a factor. If the home isn’t likely to appraise for the amount you would have to pay for the home, the lender may only be willing to lend the amount for which the home appraises. In that case you would need to be prepared to put more money down at the time the home loan closes to make up the difference.
- Forego inspections and contingencies and pay more closing costs.
It’s common to include a request for home inspection in any offer to buy a house. However, for the sellers, this might reveal the need for repairs or updates they would be asked to complete or fund before the home sale would close. Offering to pay for the home inspection (or even some of the seller’s closing costs) and forego any minor items found could encourage a seller to work with you instead of other home buyers.
- Be ready to move… or not.
The faster the home sale process can move, the faster the seller can move on. If you’re pre-approved for the mortgage that speeds up the process from the get-go. If you can also offer to take possession quickly this might be a bonus for the seller. Conversely, if the seller needs more time to pack up and move out, offering to wait and work on their time schedule could help your offer stand out from the rest.
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