How to Make a Winning Offer on a House
Stage 1: Preparation
Know Your Wants and Needs: Ask your real estate agent conduct a buyer consultation to fully narrow what is critical in your home search.
Know Your Budget: Ask you lender for a Loan Estimate for the amount you expect to pay for a house and confirm it is what you expect (don’t forget closing costs!).
Obtain a Pre-Approval letter: This is different from a pre-qualification letter. Your lender will request documents such as W2’s & Tax Returns.
Be Ready to Act: Homes located in high demand areas and priced at market value sell quickly.
Hire a REALTOR®: Have a local, full-time certified REALTOR® who is in the know about inventory, prices, and competitiveness in your target market.
Stage 2: Offer Accuracy
Legal Description: Ensure your agent throughly reviews the listing and public records to accurately capture the correct parcel number(s), legal description, and lot & block numbers.
Stage 3: Power Up Your Offer
Know What Is Important to the Seller: Your agent should speak with the Listing Agent to learn which of the following items is important to the Seller.
Know the Competitive Context: Your agent should ask the Listing Agent if other offers are expected (they do not have to disclose but often do). Also take into account how many days the home has been on market. Finally, your agent should assess local “comps” to determine how competitive the asking price is.
Always Include a Pre-Approval Letter: Sellers fear contract termination due to Buyer’s failure to obtain financing and start the listing over. A pre-approval letter gives them confidence to accept your offer.
Attach a Personal Letter to Your Offer: Demonstrating your enthusiasm for the property will give the Seller confidence you will make it to the closing table. A personal letter can give you the edge when head-to-head against a similar offer. Be sure not to violate any fair housing rules.
Consider Paying Your Own Closing Costs: Not asking the Seller to contribute to closing costs strengthens your offer.
Offer a Quick Close or Delayed Occupancy: Offering to close sooner than 30 days is a positive for many Sellers. Alternatively, there may be situations where Sellers appreciate more time to move out and find their next home using delayed occupancy.
Consider a Non-Refundable Deposit: You may include earnest money in the offer that converts to a non-refundable deposit 3 days following the completion of the Inspection & Repair contingency period.
Consider an Appraisal Waiver: This waives your right to terminate in the event the house does not appraise for the contract purchase price. Attach a proof of funds letter from your lender to assure the Seller can cover an appraisal gap.
Use an Escalation Clause: This is a fixed amount you offer to pay above any other offer the Seller receives up to a certain value (ex. Buyer will pay $1,000 over highest offer not to exceed $400,000)
Always Get an Inspection: You never want to waive your right to an inspection contingency, however you can set limitations that are attractive to the Seller, such as:
Buyer will not request any repairs (meaning your inspection will be pass or fail)
Buyer will not request a repair unless repair item cost exceeds $1,000 (i.e. no ticky-tacky repair requests)
Buyer will not terminate unless estimated repairs exceed $10,000
