A buyer makes an offer on a house they fall in love with and perceive to be a fair price, only to discover that someone has outbid them. It can be heartbreaking. However, it also begs the question: what constitutes a compelling offer on the house?
WAYS TO HANDLE A MULTIPLE-OFFER SITUATION
If a home is the subject of many bids, buyers may need to step up their game, adopt creative strategies, and enlist the help of a seasoned, full-time real estate agent. It’s not only how much they’re willing to pay that purchasers are concerned about. A decision may be made on how much they’re willing to pay above the advertised price. While there isn’t a precise formula to help a buyer decide, there are certain elements to keep in mind when putting together a buying offer that could help it win the bidding battle.
BUYING A HOUSE: HOW MUCH TO PAY?
Offers of a few thousand dollars over the asking price may be enough in some markets. When it comes to some needs, five thousand above isn’t enough. Engaging with an experienced agent who is up to date on the current market trends is essential.
STRENGTHENING YOUR OFFER IN OTHER WAYS
There’s a good reason real estate contracts are so lengthy, and pricing is just one section of the offer. A solid purchase price is crucial, but other aspects of a house purchase contract can be used to improve an offer, even in a seller’s market.
REMOVE UNCERTAINTY
Contingencies are one of the most common ways buyers weaken their offer. The house sale contingency is the most common — the acquisition is conditional on the completion of the sale of the buyer’s current home. While it is usual and reasonable to need to sell to buy, sellers may not want to deal with these offers if they can.
To avoid a contingent offer, purchasers should consider selling their home first and moving into a temporary or month-to-month residence while seeking a new property. Adding a kick-out clause to an offer might help buyers strengthen their offer if a house sale contingency is necessary.
REMOVE THE REQUESTS FROM THE LIST
Depending on the state of your local market, you may want to reconsider asking the seller to cover your closing fees. Sellers in a heated market may ignore concession requests.
Prospective homeowners should familiarize themselves with the costs of buying a home up front and the many lending options accessible before starting their search.
FORGO REPAIRS OR SET A THRESHOLD FOR REPAIRS
Sellers are working less and gaining more in a competitive market. If they find a buyer willing to buy their property, they don’t want to spend thousands of dollars on renovations. The offerings which exclude or limit the scope of inspections and repairs stand out from the rest.
It’s possible to have a home inspection without jeopardizing your offer by making an offer that states there will be no repair requests or a repair request only if the cost exceeds a particular amount.
This strategy protects buyers by guaranteeing that they won’t be charged extra for repairs if an inspection reveals something they didn’t expect.
A GAP IN THE APPRAISAL
In the past, the appraisal value of a home was the most important consideration for buyers and a significant safeguard for their interests. Some buyers, on the other hand, could be willing to pay more than the home’s current market worth. Buyers who include an evaluation gap in their buying offer might significantly increase their chances of winning.
Acquiring a property with an appraised value of less than the agreed-upon purchase price is an appraisal gap. Banks will only lend based on the evaluated value, so the buyer is responsible for any appraisal discrepancy.
WHAT NOT TO DO IN THE MARKET
Do you know how to have your proposal accepted?
Submit a high-quality offer that is both legal and ethical. Trying to win a bidding war by submitting a low-quality bid with a buyer’s love letter is no longer the best strategy. It’s dangerous, and it might even be against the law.
So instead of writing a love letter, send your most substantial/cleanest offer to stand out from the rest of the applicants. However inconvenient the situation may seem, it could spell the difference between getting the house of your dreams and having to keep looking.
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