Homes are selling at breakneck speed right now and if you want your buyer’s offer to be the one that gets accepted, you need to make sure you give them the advice they need.
Unfortunately, the don’t always take your advice.
But if they want to stand out from the crowd and have a fighting chance of having their offer be the one that secures them the opportunity to buy the home, they’ll do what you tell them to do.
Once you’ve searched high and low, near and far to find your buyers a house, follow these 5 tips to get their offer accepted:
1. The cleaner the better. The fewer ‘subject to’s’ there are on your offer, the stronger it is. Obviously, not having it be contingent on another sale is a big one. Unfortunately, some buyers need to have this one bite them in the behind and they have to learn the hard way. Do everything you can to not have there be a home-sale contingency.
Remind them, also, that if the seller is willing to take their offer on a contingency, the seller is not likely to give them a deal on the home. In addition to that, once their motivation to sell their home goes up so they can buy this home, the price of their current home will go down so it will sell fast. That means they’ll over pay for the home they buy and get less for the home they sell.
It’s a true double whammy.
As for other contingencies, try to minimize seller concessions and for sure, don’t ask for closing costs if you can help it. If your buyer needs them, it might be prudent to bump up the offer price and ask for an amount that still leaves the seller whole at full price.
Remember, neat and clean.
2. Leave the personal property out. In a normal market, asking for the pool table or stainless steel appliances that are marked as exclusions would be fair game. However, with homes getting dozens of offers within hours of going on the market, it might be prudent to not ask for them at all.
These days, most sellers aren’t really open to giving up much or even offering incentives at all:
You see, your offer could be very similar in price and other terms to a competitive offer that doesn’t want to cool lawn furniture or the felt paintings of dogs playing poker. Asking the seller to throw those things in with the sale could weaken your buyer’s offer and get them axed from the negotiations.
Remember, neat and clean part two.
3. Waive the inspection or shorten the contingency period. Shortening the contingency period is no big deal if you have a top-notch inspector who can crank out a report quickly after the home inspection.
Waiving it altogether can be a little scary, so you may want to make sure that one of these three things is in play if you’re going to mess with the home inspection contingency:
- Newer home: things take a while to deteriorate in a home. A home that’s less than 10 years old should be a fairly safe gamble to waive the home inspection.
- Right client: If your client is in the construction industry and can fix things themselves, easily, quickly and on the cheap, then waiving the inspection contingency shouldn’t be a huge issue.
- Money in reserves: Nobody likes surprises, but if your client has money in the bank to protect themselves if something comes up after they’ve moved in without doing an inspection...they should be okay to waive the contingency.
By waiving or shortening the home inspection contingency, you buyers are 1) showing the seller they are serious about buying the home and 2) saving the seller a ton of headaches and liability when selling the home.
It’s a big decision, but one that could sway the seller in their direction when executed at the right time for the right buyers.
4. Money talks. Offering over asking price has, unfortunately, become all too common in this current real estate market. Price is a function of supply and demand and with demand through the roof on just about any well-priced home with a good location. most sellers can get top dollar for their home.
If your client is getting financing, the saving grace here is that they will have an appraisal that can protect them. If the home doesn’t appraise at the price at which they’ve agreed upon, the buyers can always negotiate.
And, if money is no object and your buyer really wants the home, they can offer over asking price and waive the appraisal contingency. Doing that will definitely get the seller’s attention - for sure.
5. Offer free month of occupancy. If you schedule the closing a few days after the first of the month (five days to be certain), your buyer won’t have a payment for the rest of that month or for the following month.
Yes, their prepaids and escrows may be a bit higher but they don’t have to pay the mortgage company a dime for roughly 55 days.
And because of this, they can offer the seller a month to get their stuff packed up and close on their next home...for free.
It’s a huge value to the seller not only because of the money it saves them, but also because of the huge reduction in stress that it provides.
If you’ve never offered this to a seller in a competitive situation to get your client’s offer accepted, you need to try it.
It’s a ninja strategy for sure.
One of the other strategies you can use is to have your buyers put down more earnest money, which lets the seller know your clients are not going to walk away from a huge pile of dough and stiff them in the process.
This is especially effective when your buyers put down more than their specific loan program requires. If your buyers are going FHA and are required make a downpayment of 3.5%, but put down 5% of the value of the offer, that sends a signal to the seller that your buyers aren’t messing around.
There’s also an escalation clause strategy you can employ on behalf of your buyers, but a lot of Multiple Listing Services (MLS) frown upon them.
An escalation clause gives your buyer negotiation power even after the offer has been presented. With an escalation clause, you can tell the seller that your buyer will go $X over the next highest offer in an effort to stay ahead of any competing offers that come in.
If the escalation clause gets your client’s offer accepted, you’ll want to make sure that a copy of the the competing offer (with vital info redacted) is presented back to them with their accepted offer to prove there was actually an offer that caused the escalation.
A competitive market doesn’t mean you can’t get your buyer’s offer accepted. You simply need to employ some creativity and use some (even all) of the tips I’ve shared here to set your client’s offer apart from the competition.
When you do that, your buyers will be hearing more: “Yes’s” and less “No’s” for sure.