As they say, the early bird gets the worm! Sometimes, the secret to getting a “yes” is as simple as being the first to offer on a property. Be sure to have automatic alerts set up with your real estate agent, so you’ll instantly be notified about new properties as they hit the market. Then, don’t hesitate! Run the numbers and make the offer! Don’t let fear slow you down.
Rather than playing a game with the seller, offer your maximum offer right up front. If they counter…and try to make you go higher, just say no!
When offering on a piece of property, remember that there is always a person at the other end of the line making the decision. So if you want to get your deal accepted, get that person to like you! I think the best way to do this is simple: include a letter with your offer.
This doesn’t have to be anything formal, just a quick message letting the seller know who you are and what you plan to do with the house. This lets the seller know that you are a real person! (Include a family photo for added benefit!)
If you can afford to offer all cash on a property, this can help you get an offer accepted, even if other potential buyers have offered more! Sellers love cash buyers, because they know the money is there, and the risk that the buyer will not be able to
follow through drops significantly.
Most sellers know that their property needs a lot of work. Therefore, sellers get nervous when people want to do an inspection of the property. They fear that they will accept an offer, and then a week later, the buyer will back out because they discovered how bad the property really is. Therefore, if you want to dramatically increase your chance of getting an offer accepted, don’t include an inspection contingency. Again, this will increase your risk, because if you learn something about the condition that you did not expect, you can’t back out without losing your earnest money deposit. However, removing the inspection contingency can be a powerful way to make your offer stand out.
Once a seller decides to sell their property, they can’t wait to get that burden off their shoulders! Make your offer stand out by offering a shorter (sooner) closing date. Of course, if you are using a normal bank loan, you might not have much of a choice (banks typically take 30–45 days to get through all the paperwork to buy a property). But if you are using cash, private, or hard money, set a quick close date.
Show the seller you are serious by offering a larger earnest money deposit. Although 1%–2% is customary, consider offering significantly more to show the seller how dedicated you are. Just be sure you have those contingencies in place, should you later want to back out. Assuming you hold up your end of the bargain and you have the right contingencies in place, it won’t cost you any more in the long run since the deposit goes towards your down payment if financing is involved.
If you’ll be using bank financing for the purchase, be proactive and include a copy of your pre-approval letter with your offer. It’s one thing to tell the seller that you can qualify, but it’s another for them to physically hold the pre-approval letter in their hands so they know that the sale will go through.
An escalation clause can be included in an offer and is used when a property might have multiple bidders. It essentially says, “If someone else bids higher than me, this offer will automatically increase to $X above theirs, up to a certain point.” So you might offer $100,000 on a property but include an escalation clause that says you will pay $500 higher than any other offer that comes in, up to $110,000. This way, if someone comes and offers $106,000, your bid will automatically increase up to $106,500. The danger of an escalation clause, of course, is that it tells the seller exactly how high you will go!
Selling a home can be expensive, so if the math works for you, consider offering to pay part or all of the seller’s closing costs.
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