Summer is traditionally a busy time for buyers and sellers. This year has been no exception —and with lower interest rates, many homebuyers are finding the competitive environment challenging. With multiple buyers competing for properties, even terrific offers are often being outbid.
Fortunately, there are some things you can do to make your offer more attractive to the sellers and increase the chances of getting the property.
Have Full Pre-Approval
A step beyond pre-qualification, a pre-approval involves submitting your full application to underwriting. Your lender will collect all your financial data and submit for review. This is stronger than a pre-qualification; a pre-approval requires the buyer to provide proof of their ability to qualify for the loan.
Increase the Earnest Money
Earnest money is the deposit held in escrow. While the contract will dictate how monies are disbursed in the event of a cancellation, increasing the amount offered can show the seller you’re serious.
Add an Escalation Clause
In a bidding war, it can be difficult to know what to offer because you want to outbid the competition without going too high. An escalation clause is one way to automatically outbid the others. The clause typically offers an amount—$1,000 for example—higher than any verifiable offer up to a specific amount. This can ensure yours is the highest offer.
Pay any Appraisal Shortage
When offering more than the asking price, sellers become concerned about the appraisal coming in too low. If you are willing to pay over market value, include the amount of shortage you are willing to pay.
Remove Inspection Contingency
This option can be tricky, but if you are planning a large remodel or are willing to tackle any defects found, then you can make your offer stronger by accepting the home as-is.
In this fast-moving, competitive real estate market, it’s important to make your offer stand out from the crowd. These strategies are great ways to demonstrate to the sellers that you’re serious about buying their home, increasing the chance of having your offer accepted. Learn more about how we can help, you win the bid on your dream home today!! Contact the Stephanie MacDonald Team today.