Thinking of making an offer way above asking just to ensure you snag your dream house in a competitive market? Not so quick.
While cash is certainly enticing to a home seller, other factors play into the decision to accept an offer as well. Some items in your purchase contract that can even outweigh your super-sized offer. Here, realtor.com explains how a successful sale goes beyond money and how to be sure you land the keys.
1. Be flexible on the timeline
One of the possible deal breakers includes timing. For example, it can be a turn off if a seller needs more than 30 days to leave the property and a buyer is pressuring them to move out sooner and they haven’t even found a new home.
On the other hand, however, the sellers might have already vacated the property and are eager to unload it. That’s why customizing the length of the closing period to meet the sellers’ needs can be more important than the bottom line. Ask your real estate agent to find out what they need, and then let them know you can accommodate them.
2. Have your paperwork squared away
It’s important to be pre-approved for a mortgage before you begin your home search. Among the reasons why? The deal can blow up if you haven’t been pre-approved. If you don’t have the financing in place to make your initial down payment and closing costs, it doesn’t matter how many dollars you promise the sellers.
When you’re ready to put in an offer, make sure your pre-approval is within 30 days or less. If sellers see that the pre-approval was done more than 60 days ago, that could make them wonder if you’re still credit-worthy to get a loan.
Another no-no is making a large purchase (such as a car) during the escrow period—even if you have the money to do so. It might affect your ability to obtain financing, and that’ll be another major red flag to the seller.
3. Don’t ask for too many contingencies and concessions
If you’re in a bidding war for your must-have home, you not only want to go in with the highest offer but also the cleanest one.
Be sure to make the deal as sweet and competitive as possible, so that if the seller takes it, there’s a very good chance that the sale will go through. For example, the seller may not consider your offer as favorable if you have a contingency stipulating that your home must sell before you purchase the seller’s house.
Another potential turnoff: Negotiating for a large concession, like for the seller to pay all of the closing costs.
Instead, ask for the bare minimum closing costs—or none at all—and make sure the concession doesn’t dip into the seller’s price tag. For instance, if a house is listed for $300,000, and you can go up to $310,00, then put in $310,000 with a $10,000 seller’s concession.
4. Don’t request that too many things be included with the home
Sellers might wave you off if you ask for the custom drapes, high-end appliances and Scandinavian hot tub to all be thrown in with the house. If the sellers put in the listing that the chandelier isn’t included, then don’t ask for it to be thrown into the deal.
You might think you’re paying for all that stuff with your higher offer, but if you really want the house, tread lightly here. You risk offending the sellers if it looks like you’re trying to squeeze as much out of them as possible.
5. Be sure to express your love for the house
You might not be the only one bidding high, and when similar offers are on the table, the sellers sometimes will look for other factors to break the tie—that another happy family will live in their cherished home, for example.
Or that the buyers won’t be gutting it and turning it into something totally different. So, how can you sway sellers who love their home? Give them some idea of who you are and why you want their home by taking a picture of you and your family.
It all depends on who your target is, though. If your seller is an investor, they’re probably not going to care—they just want the money.
But if they raised their family there and want to sell it to another nice family, an emotional appeal might work. Writing a love letter to the sellers also can seal the deal sometimes, with a buyer outlining why they feel this house would suit their family needs and how they can keep on the tradition of what the previous owner has.
6. Don’t give up if your offer is initially refused
If the sellers reject your bid, hang in there. Contracts that come in way over asking price tend to have a high cancellation rate, perhaps because the buyers didn’t have pre-approval and their financing fell through.
Toward that end, make sure things always end nicely with the listing agent, and tell them that you want to be kept in the loop should there be any problems with the accepted offer.
Ask your agent to check in every two or three weeks, because instead of putting it back on the market and creating a whole new bidding war, the listing agent may just go to the next most attractive offer: yours.