7 Ways to Make Competitive Offers

This past weekend, my team sold two homes. Both homes sold above asking price with multiple offers. This year is looking to be a repeat of last year's trend of low inventory and high demand. This shouldn't discourage you from buying a home, it just means you need to align yourself with an aggressive agent who can advise you on how to submit a competitive bid.

1. Pricing

How much you are willing to offer is important, yes. However, you should know the value of the home before you offer a million dollars on a fixer-upper. Your agent should provide you with a CMA which compares the home of interest with other properties in the neighborhood. This gives you a framework to help you decide on a reasonable price.

2. Inspections

How many inspections will you require? If you require structural, pest, radon, or other inspections, you are making your offer less competitive. Each inspection is another opportunity to back out of a deal which creates doubt in the seller. You want to work with an experienced agent who can guide you on how to get the inspections you want without sacrificing the integrity of your offer.

3. Timeline

Think about when the seller wants to close. They have their own schedule and desires. You can accommodate them by being flexible. Your agent should find out what the seller wants so that you can make your offer stand out.

4. Escalation Clause

This is an incredible tool that some agents do not use. Essentially, this allows you to submit multiple bids within the same offer. Think Ebay's auto-bid feature. For example: You submit an offer of $400,000. The seller also receives a second offer for $410,000. Your offer is accepted at $415,000 because your agent wrote an escalation clause stating you are willing to offer $5000 offer the next best offer.

5. Personal Letter

You can submit a personal letter along with your offer to appeal to the seller's emotions. Your agent can help you draft a powerful letter. If you strike an emotional chord, your offer can beat higher offers,

6. Deposit

This is what you include with your written offer and shows how serious you are as a buyer. There is no requirement to how much of a deposit you should submit with your offer. Your agent will advise you on how much you should put down to strengthen your offer.

7. Pre-approval letter

If you are using a mortgage to purchase a home, your pre-approval letter needs to match your written offer. Your agent should be in communication with your mortgage lender to ensure that the approval letter is appropriately written to support your offer.

These are just a few way to make your offer competitive. As always, I am available to answer any and all questions. My contact info is listed at the bottom of the page.

-Cheers,

John