Quarterly Update July 2019 – How to Write a Competitive Offer
6 Tips for Buyers in a Seller’s Market
If you’re a buyer in this seller’s market, you’ve likely found out that it can be hard to get an accepted offer on a home. Multiple offer situations have made it especially difficult for a buyer to snag the home of their dreams. However, there is still hope. Here are our Top 6 Tips for writing an offer that will beat out the competition.
1-Get Preapproved, Get Preapproved, Get Preapproved (or pay cash). We’ve been harping on this one for a while, but it truly is vital in this market to get preapproved with a lender before you even start looking at homes. Most sellers won’t entertain an offer if it doesn’t come with a preapproval letter (unless it’s a cash offer). So, first things first, meet with a lender. (And if you need a referral for a great one, let us know!)
2-Don’t write a lowball offer. In a buyer’s market, lowball offers can get you a great deal. But in this seller’s market, most homes are selling at or above listing price, so a lowball offer will get you nowhere. Make sure your offer price is reasonable. Also, offering as much as you can for the earnest money deposit and cash down will make your offer more attractive to sellers.
3-If you need to sell in order to buy, do that first. Especially in multiple-offer situations, a seller may refuse an offer that is contingent on the buyer selling their home. If at all possible, sell your home (or at least list it) before you buy.
4-Don’t ask for Seller Concessions. In a buyer’s market, it’s common for sellers to pay closing costs for a buyer. In this market, that’s unlikely, and is not something a seller wants to see on an offer. Also, don’t ask for too much personal property or make unnecessary demands on a seller (major fixes=yes, minor fixes/cosmetic changes=no). If a seller has to work harder to sell to you, they’re likely to reject your offer in favor of a simpler deal.
5-Put an escalation clause in the offer. This is something we’re seeing more often in this market. An escalation clause says that you are willing to beat any other offer by X number of dollars, up to a certain dollar amount. In multiple offer situations, this can be what clinches the deal for you.
6-Write a letter to the seller or make a video. This is another thing that can set you apart from other buyers in multiple offer situations. A letter or video telling the seller a little about yourself and how much you like their home is a great personal touch that will make you stand out to a seller, making them more likely to consider your offer.
This is not an exhaustive list, but these six things are sure to help you write a more competitive offer. If you have questions, or are ready to start the buying process, give us a call, text, or email today – we’re here to help!
Brok Hansmeyer – 218-390-1132, firstname.lastname@example.org
Kevin Kalligher – 218-606-0198, email@example.com
Curious about how the Duluth area Real Estate Market is looking so far this year?
Click here or on the photos below to read our most recent newsletter for market statistics and more!