5 Ways to Write a Winning Offer in Today’s Real Estate Market
Our nation is in the midst of a serious housing crunch. Last year, a lack of inventory and soaring prices left many would-be homebuyers feeling pinched. But now, with interest rates climbing, many of them are also feeling desperate to lock in a mortgage—which has only added fuel to the fire. 1
Fortunately, if you are a buyer struggling to find a home, we have some good news. While it is true that higher mortgage rates can decrease your purchasing budget, there are additional ways to compete in a hot market.
Yes, a high offer price gets attention. But most sellers consider a variety of factors when evaluating an offer. With that in mind, here are five tactics you can utilize to sweeten your proposal and outshine your competition.
We can help you weigh the risks and benefits of each tactic and craft a compelling offer designed to get you your dream home—without giving away the farm.
- Demonstrate Solid Financing
- Put Down a Sizeable Deposit
- Ask for Few (or No) Contingencies
- Financing: A financing contingency gives the buyer a window of time in which to secure a mortgage. If they are unable to do so, they can withdraw from the purchase and the seller can move on to other buyers.
- Inspection: An inspection contingency gives the buyer the opportunity to have the home professionally inspected for issues with the structure, wiring, plumbing, etc. Typically, the seller may choose whether or not to remediate those issues; if they do not, the buyer may withdraw from the contract.
- Appraisal: Most lenders will not offer a mortgage on a home that costs more than it is worth. An appraisal contingency gives the buyer an opportunity to get the home professionally assessed to ensure that its value is at or above the sales price. If an appraisal comes in low, the seller may be asked to renegotiate the contract.
- Sale of a prior home: Some buyers cannot afford to purchase a new home until they sell their previous one. If the buyer is unable to sell their current home within a specified window of time, this contingency enables them to withdraw from the contract without penalty.
- Offer a Flexible Closing Date and/or Leaseback Option
- Work With a Skilled Buyer’s Agent
which means the vast majority are financed with a mortgage.2
Most real estate offers include contingencies, which are clauses that allow one or both parties to back out of the agreement if certain conditions are not met. These contingencies appear in the purchase agreement and must be accepted by both the buyer and seller to be legally binding. 5
Common contingencies include:
Since contingencies reduce the likelihood that a sale will go through, they generally make an offer less desirable to the seller. The more contingencies that are included, the weaker the offer becomes. Therefore, buyers in a competitive market often volunteer to waive certain contingencies.
However, it is very important to make this decision carefully and recognize the risks of doing so. For example, a buyer who chooses to waive a home inspection contingency may find out too late that the home requires extensive renovations, and a buyer who waives the appraisal may risk their mortgage falling through. If you back out of a home purchase without the protection of a contingency, you could lose your earnest money deposit. 6 C4 Home and Land Team can help you assess the risks and benefits involved.
Plus, we know how to write offers that are designed to win over both the seller and their listing agent. The truth is, listing agents play a huge role in helping sellers evaluate offers, and they want to work with skilled buyer’s agents who are professional, communicative, and courteous.
Once your offer is accepted, we will also handle any further negotiations and coordinate all the paperwork and other details involved in your home purchase. The best part is, you will have a knowledgeable, licensed advocate on your side who is watching out for your best interests
every step of the way.
Helping You Get to the Right Offer
In many cases, a competitive offer does not need to be all-cash, contingency-free, or significantly above asking price. But if you are serious about buying a home in today’s market, it’s important to consider what you can do to sweeten the deal.
If you are a buyer, C4 Home and Land Team can help you compete in today’s market without getting steamrolled. And if you are a seller, our team can help you evaluate offers by taking all the relevant factors into account. Contact us today to schedule a free consultation.
1. National Association of Realtors – https://www.nar.realtor/newsroom/pending-home-sales-dwindle-4-1-in-february
2. National Association of Realtors – https://www.nar.realtor/newsroom/existing-home-sales-fade-7-2-in-february
3. Forbes – https://www.forbes.com/advisor/mortgages/housing-crisis-tips/
4. Realtor.com – https://www.realtor.com/advice/finance/earnest-money-deposit-mistakes-buyers-make/
5. Bankrate – https://www.bankrate.com/real-estate/contingency-clause/
6. Home Buying Institute – http://www.homebuyinginstitute.com/mortgage/risks-of-waiving-a-contingency/
7. Realtor.com – https://www.realtor.com/advice/sell/what-is-a-rent-back-agreement