These four tips will help your buyer come out on top in a bidding war.
Recently, one of my agents came to me and said, “Ron, how do I get my offer accepted? My buyers keep getting beaten out.” If you’re asking yourself the same thing, there are four main things you can do to elevate your buyer’s offer to the top of sellers’ minds.
First, make sure your buyer is pre-approved by a local lender. When there’s a local lender involved, chances are good that local agents know them and have built trust with them.
Second, put down a large deposit. Although most of the houses in our area are listed between $300,000 and $500,000, I’ve seen some people put down deposits as low as $2,500. That kind of a deposit won’t make your buyer look strong in a seller’s eyes. If they can put down a $10,000, $20,000, or even $30,000 deposit and write that into the purchase agreement, however, it’ll go a long way toward their offer getting accepted.
Third, remove some contingencies. You need a very strong buyer to attempt this. One contingency they can remove, for instance, is the appraisal contingency. In a competitive market, the price of a home tends to get bid upward, so if your buyer is strong financially and has cash reserves, they can remove the appraisal contingency.
“You have to look at the seller’s bottom line because that’s what they’re looking at when they have multiple offers.”
However, they should understand that this means they’ll have to make up the cash difference if the appraisal doesn’t match the agreed-upon sale price. If they can make up the whole difference, that’s great. If they can’t, they can still cover a portion of the difference. For example, they can agree to pay an extra $10,000 above the appraised value (not to exceed the agreed-upon sale price) if the appraisal comes in low.
Other ideas for this tip include:
- Closing the gap in the contingency removal period. The default period is 17 days, so try shortening it to 10 days.
- Telling the seller that you’ll still order a home inspection, but you won’t ask for any repairs.
- Telling the seller you’ll order a wood-destroying organisms report, but you won’t ask them to fix anything.
You have to look at the seller’s bottom line because that’s what they’re looking at when they have multiple offers: who’s the strongest, won’t cost them any money, can close on their terms, etc.
Lastly, find out what’s most important to the seller. It may not be the highest-priced offer. They may need to do a rent-back or establish a 60-day escrow period. The only way to find out is to call their agent and find out what they want most.
If you try these tips and still have a hard time getting your offer accepted, don’t hesitate to reach out to me. I’d love to speak with you.