In a seller’s market, when inventory is low and the number of buyers is higher, multiple-offer situations are extremely common. It’s perfect for homeowners who are trying to get top dollar for their houses, but it’s not so great for buyers who are trying to find a new home. It’s incredibly frustrating to be been outbid time and time again by others who are able to offer more money or better terms. How on Earth are you supposed to afford a new home when prices keep getting raised by competitive buyers?
By getting creative.
Believe it or not, it’s possible to appeal to a seller without stressing over your initial offer. Take a step back from the paperwork and ask yourself what you have to offer that other buyers don’t. What can you give or do that other buyers cannot?
Waive a Contingency
Even if the dollar amount of your offer is less than others, you can make the offer look more appealing by letting go of some contingencies. For example, if you’ve already been approved for a mortgage and are confident that it will go through smoothly, think about waiving the mortgage contingency. And if you really, really want the home, don’t ask for extras. Take out that clause that asks for a home warranty or new appliances. The less a seller has to do, the better.
Sweeten the Deal
Do you have access to something that’s useful or hard to get? Use it as a bargaining chip. Maybe you can offer tickets to a certain sold-out performance or sporting event. Perhaps you own a moving company and can offer to help the seller out when moving day rolls around. Think of something or some way to help out that would be valuable to this specific seller.
Write a Letter
This isn’t a new strategy, but it’s still a good one. Include a handwritten letter with your offer, introducing yourself and your family and explaining to the seller exactly why you want to buy their house. They might be more inclined to sell to a loving family than an investor who might not ever step foot inside the house. Go a step further and include a photo of your family with the letter. It never hurts to appeal to someone’s sentimental side!
Include an Escalation Clause
Simply put, an escalation clause says that you will outbid other buyers’ offers by a certain amount up to a specified cap price. For instance, let’s say you offered $200,000 on a home. You might include a clause that says you will automatically raise your offer by $5,000 over any other buyer’s offer as long as that amount doesn’t exceed $225,000. It’s a great way to compete with possible higher offers without offering more to begin with. Just make sure you aren’t presenting a lowball offer just to see what you can get away with. That could offend the seller and they might just ignore your offer altogether.
Work With Shorter Time Frames
If you know your mortgage lender can close the deal in less than the typical thirty or so days, you might want to offer to close sooner. Keep time frames tight on all inspections and other contingencies as well. The ability to move things along quickly inspires confidence in the seller that you’re as ready to get to the closing table as they are.
Above all, be sure to consult your favorite real estate agent about the best strategy for you and your specific situation. Before you decide to try any of the above tactics, speak with your Realtor® to make sure they’re on board. There might be certain local laws or customs that contradict what you want to offer.
