There is a better way
The market over the past year has been on fire. Many sellers are finding their home selling quickly and for top dollar. If you have sold a home in the last 18 months you can attest to the excitement. If you’ve been a buyer (successful or unsuccessful) you can also attest to the immense frustration felt by many buyers.
After months of searching many buyers have found the perfect home only to find themselves in the middle of a bidding war or worse; making a great offer only to find out they’ve been completely shut out of the process and are about to start the entire process over again (and again).
If you are a buyer, I feel your pain. While I spend most of my transactions on the sellers side of the table, I can still see and feel your frustration. The people part of this business is what continues to drive me to be successful. Home ownership is part of the path to financial wellness and I want people (even those on the other side of the table) to find success and happiness in life’s journey.
There is a better way. Below is a short list of ways that I think buyers can make their offers more attractive and competitive to sellers.
1-Don’t ask for closing cost assistance.
Sellers feel this request IMMEDIATELY. By borrowing the extra amount you will feel a few extra dollars leave your pocket every month over the course of the loan, but the sellers feel that tug as a big expense. If you don’t have the cash to close the loan, are you really a ready and qualified buyer. When putting together the details of your offer, remember a $300k offer with $10k in closing cost assistance, looks and feels a lot like a $290k offer to the seller.
2-Offer the seller due diligence money
Due diligence money that you place in the sellers pocket from day 1 of the accepted offer. It shows the sellers that you have skin in the game and that you are a serious buyer. This money does count towards the purchase of the home, but is never refunded if you decide to walk away from the deal, so make sure you can afford to lose if if you end up having to terminate your contract.
3-Make your due diligence period shorter or get to closing faster
This can be tough to do when banks and inspectors are backed up, but if you can keep the deal shorter and get finished up before your competition, it could make your deal even sweeter for the sellers. Once a home has an accepted contract, sellers can’t accept another offer. They can continue to show the home, but if another offers comes up it can only be considered a back up offer. A quick closing and due diligence period, makes sellers a little less uneasy about taking the home off the shopping shelves while you are doing your inspections.
4-Offer more than the asking price
The current market is very competitive for buyers. Even just a few thousand dollars over asking price could be enough to set your offer apart from the others and move the needle in your direction. You may find that the slightly higher offer price in conjunction with the other items above may be all it takes to make your dream home a reality.
BONUS
A very alarming trend for me, even as someone who spends the majority of their real estate time on the seller side, is the buyers willingness to waive inspections. I highly advise you to NEVER do that. There’s too much of your money at stake, and there can be some really big things hiding in the house that even the sellers aren’t aware of. An alternative approach is have the inspections done so you know what you are buying and just not ask for any repairs.
More content coming soon
As the market continues to ramp up in the spring, I have a lot of other great content coming down the pipe. There’s something for everyone in the works, and if you like the videos, there’s plenty more on my YouTube channel and web site. Be sure to like and subscribe there and on your favorite social media platforms so you can stay plugged in and in tune to the world of local real estate.
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Chris Whitehurst
Rose and Womble Real Estate
252 312 2263