Click your heels together three times and say “There’s no place like home.” If only we could click our heels like Dorthy and be transported to our dream home. It turns out that your dream home may also be another’s dream home as well.
Many of you have been asking – what the heck does it take to win an offer on a home right now? The housing market has been a tough one for homebuyers in the last year. With record low inventory, low interest rates, and more buyers entering the market, it has been competitive for homebuyers. But, don’t lose hope. We are here to give you advice on how to submit the best possible offer to avoid heartbreak and come out victorious.
Cash > Financing?
One common misconception buyers have had lately is that they need to put in an all cash offer well above the asking price of the home to guarantee their offer will be accepted. While this has historically been a way to get a leg up and in many situations still holds true, cash does not always win. Typically, when buyers pay in all cash, they are looking to close quicker. In today’s market, that may not be the motivations of the seller. The seller is looking to get top dollar and also wants to take an offer that fits in with their motivations for selling. They may not be incentivized to take an all cash offer closing in a week because they also need to find a place to move. Try to get all the info before making the offer on the seller’s motivations.
Have your pre-approval letter from a reputable lender ready and your offer could be just as likely to get accepted as an all cash offer. At the end of the day, it is about the entire package. Also, in most cases lately, buyers have back up offers so they are more comfortable taking a buyer who has financing. If the financing falls through, they have other offers ready to go.
The Package
The price and the package you offer the sellers all go into the formula. By finding out the seller’s motivations for moving, you can craft a deal that is in their favor. This can include, flexible closing date, a seller leaseback (this is where you lease the property back to the seller for a few months), and waiving certain things such as inspections and contingencies. While real estate agents typically do not encourage waving inspections, an agent can give you good advice on a property by property basis. For example, it may feel cozier to skip the inspection on a newer home rather than that 1950s rambler with uneven floors.
Buyers have also been getting creative. We recently heard of a buyer submitting an offer and including a week vacation for the sellers at their beach home. Another buyer struck a deal with the seller to let him live in the guest house until he found a new home. These are only extreme examples and we are not encouraging you to give up days at your vacation house, but with a good agent, they can talk to the buyer’s agent and find out any special circumstances the sellers may have. For example, they might have a job transfer in several months and need a longer closing period with a free leaseback. Communication between the seller’s and buyer’s agent is key to a successful offer.
That Personal Touch
Think of all the amazing memories you have had at your previous homes. You may have taught your kids how to ride a bike in the driveway, buried a time capsule, or put your handprints in the concrete. The seller has most likely made the same memories at the very same house you are trying to buy. When submitting your offer, let the seller know how much you bonded with their home and that you plan to make lasting memories there. Ultimately, it is 100% up to the seller on what offer they take and by adding a personal touch, you are showing them that you are human and care about their home. At the end of the day they are humans and their home is an emotional attachment.
You can increase your chances of getting your dream home by writing a personal letter. In the letter, introduce yourself and family, write about the things you love about the home, and let them know you will take great care of it. Although there is no 100% guarantee they’ll read it, when they are sifting through offers, the chances they will remember yours will be higher.
Work With A Pro
The most important step in this competitive market is to work with a real estate professional. Experience, communication, and connections are key to the winning offer. Agents have been navigating this dynamic market and know what it takes to seal the deal. They can also communicate with the seller’s agent to find out what it will take to get you into the house. Real estate agents are a tight knit group and as long as you hire an experienced agent who has been in the industry for several years, chances are they have a personal relationship with the other agent. Buying a home is one of the biggest investments of your life. Having an agent by your side is not only convenient but it is smart.
At Lovato Properties, we are here for you. We have been helping clients navigate the market of Boulder, Colorado for several years. We have helped numerous clients and friends produce the winning offer and get into their ideal house. Are you thinking about buying or selling? Reach out today!