Let's face it, in this market being a buyer isn't very fun. The National Association of Realtors® claims that the average buyer writes 3 offers before having one accepted. That number is low for the northeast, which is closer to 5 offers before having one accepted. If every buyer sees 5 homes for everyone they like enough to write an offer, then that's 25 homes (!) they have to view in person before they might get an offer accepted.
This isn't fun. Shopping for homes is supposed to be fun, like that first date where you believe deep down you've fallen in love over bowling and french fries! It's not supposed to feel like the 6th guy in a row who stood you up or the 7th girl who ghosted you after you paid for dinner.
Let's fix this. There are a lot of ways to make your offer more attractive to the seller. Here are the first 40 I could think of while writing, there are many more that I use with my clients.
- Offer more money. Seems obvious, but many sellers simply want to make as much money as possible (after inspections and negotiations more on that in a second).
- Waive the appraisal contingency. If you're putting down more than the minimum your loan requires then you will be able to make up a gap in the appraisal, should the appraisal come up below your offer price. This scenario scares sellers, so waiving the contingency and promising them you'll make up the difference makes them feel comfortable taking a high offer that might be more than the appraisal thinks it's worth.
- Cover a portion of the appraisal gap. Just like #2, but instead of any size gap, you promise to make up a certain amount. "Buyer to contribute up to $10,000 if the appraisal is below purchase price."
- Guarantee you'll buy even if the appraisal is low (at the appraisal price). "If the appraisal is less than the purchase price, the buyer will proceed with the purchase at appraisal price and will not terminate the contract unless forfeiting the deposit."
- Waive inspection. Sellers in this market know that buyers are trying to weasel their way into securing a home, but then use the inspection to get money off the price. If you waive the inspection, sellers feel much better about taking your offer!
- Put a minimum inspection contingency in your offer. "Inspection for informational purposes only unless repairs exceed $10,000". This shows you aren't nit-picky and you'll buy the home even with small problems.
- Tell the seller you won't ask for repairs. "Inspection for informational purposes only."
- Book the inspection before the offer is accepted. Sellers don't want to wait to get paid, especially if they're trying to buy another house. When you submit the offer, tell them you already scheduled the inspection for 1-2 days after the offer acceptance so you can shave a week off the normal timeline.
- Let the seller pick the dates. If you are flexible, your agent should specifically ask the listing agent what dates the seller would like in the contract. Why pretend to know what works best for the seller when you can literally just ask!
- Make the dates flexible. "Seller has the option to extend closing date up to 30 days at seller's sole discretion with 7-day notice given to the buyer." Some sellers don't have their next plans set in stone and this flexibility helps!
- Set a quick offer expiration. If your offer is strong, don't give them time to get other offers. Come in early and strong and make them believe you'll walk away if your offer isn't accepted quickly. This doesn't happen enough nowadays.
- Set along with offer expiration. If your offer is good (not great), then you don't want to frustrate the listing agent or seller and make an enemy. If they want all offers in by next Wednesday, give them until next Thursday to review. Then it shows you'll comply with their preferences and that you're willing to wait for them to feel comfortable.
- Don't pick stupid expiration dates. If I receive an offer for my seller's home at 8 pm, I'm not going to meet with them that night. I might not even see the email till the next morning. Give me time to get it, review it, talk to the seller, and give the seller time to think.
- Be reasonable with your contract dates. Remember that attorneys don't work on weekends, and rarely after 5 pm. Pick your dates accordingly.
- Pick good attorneys who work quickly. If your attorney can't turn around a contract in just a couple of days, you're going to have a bad time. Work with attorneys who understand what the buying market is like and don't let them go!
- Don't mess around with deposits. In a market where a home sells in the first weekend 90% of the time, it's a death sentence for a home to go back on the market. By increasing the size of your deposits, you're showing the seller that has zero intention of walking away.
- Even if your loan allows for a small down payment, still use reasonable deposits. For example, VA loans may require 0% down but there's no chance I'm recommending my seller take an offer with zero money down. Remember that you can get that deposit money back at closing!
- Write a letter to the seller. Many personality types will make their decisions with emotion instead of logic. A letter that shows a) why you and your family are awesome and b) why the seller's home is perfect for your family might make the seller want you to have their home, often instead of someone who offered more money but just numbers on a page.
- Include a picture, or better yet, a video! That letter should include at least a photo of you and your family (pets too!). And if you shoot a short video, include that too! Trust me, it works.
- For the love of God, do what the listing agent asks. I can't tell you how many times I've stated exactly what is needed in an offer for my seller's home and the buyer's agent includes some of those items. This makes me think the agent is bad at their job and will screw something up later that will cause me to put the home back on the market. See #16.
- Take 'highest & best' seriously. Sometimes a listing agent will ask for the 2nd round of offers, often called 'Highest & Best. They are looking for anyone who has already submitted an offer to submit their highest price and best terms for final review. Sometimes this is to squeeze a few more dollars out of the top offers. Other times it's because multiple offers are very similar in price and terms, and the seller wants to see if anyone is holding back their best offer. You will never know which it is, so treat it like the 2nd option and take it seriously. If you have anything you could change, change it.
- Before submitting 'highest & best', ask what the seller wants. Often sellers are looking for something specific that hasn't come yet in the current offers. There's no harm in your agent asking the listing agent, "Is there anything specific we can change to make our offer more appealing to the seller?" Then do that.
- Make your deposit (or some of it) non-refundable. If you are including other contingencies (appraisal, inspection, financing) then the seller worries you're willing to walk away. If you make some of your deposit non-refundable under any circumstances, it shows you're willing to solve problems instead of quitting on this home if something goes wrong.
- If FHA, offer to fix appraisal condition items. FHA loans will include an appraisal that could stop a deal over small things like paint peeling or a missing railing. The seller doesn't want to fix them and is worried you'll lose the lending. For example, "Buyer will remedy up to $5,000 in FHA appraisal condition items."
- If you're buying with cash, scream it from the rooftops. all over your offer, it should highlight that you're a cash buyer able to close whenever the seller wants. You have some real power here, show it off.
- If you're a cash buyer, so then you're #loaded. Sellers want to know you won't change your mind later because they can't afford the house. Don't show them one bank account with just enough money to make the purchase. Show them everything that says you could buy this house twice if you wanted to.
- In a multiple offer situation, show the highest preapproval letter you can. If there is a tie between two offers, the one with stronger financing wins because it's more likely to close. My seller wants to know if something bad happens like your wife is laid off, that you could still afford to buy the house on just one salary.
- In a single offer situation, show a preapproval that matches your offer. This way they won't try to squeeze more money out of you. They will think it's all you can afford. There are no other options for them, so they'll have to take yours. Caution: If the home is new on the market, they will expect more offers. Home needs to have at least a week or two with no offers yet.
- Have your lender call the listing agent. A good lender knows their worth and can explain it to the listing agent. This vote of confidence shows you are strong financially and will confidently get to the closing table with ease.
- Use your agent's preferred lender. Don't use Wal-Mart of lenders. They tend to be the giant banks named after countries, or they specialize in getting you pre-qualified with ease! Buying a house takes a lot of paperwork, if your lender specializes in using less paperwork, it increases the odds they miss something and screw up your deal while costing you thousands.
- Use their agent's preferred lender. Even better than using a good lender, is using the lender the listing agent prefers. It guarantees the listing agent will feel comfortable telling the seller that your financial situation is solid.
- Your agent should tell the listing agent how good they are at their job. I work on the #1 team in the state in both the number of homes sold and total volume if you add up the value of all the homes. This means when I secure a home for my client, I can guarantee everything will be handled the best it possibly can be handled. I make it a point to tell the listing agent that this will be the easiest deal they will have all year if they decide to work with me and my buyer. And then I follow through on that promise.
- Don't be creepy. If you slowly drive by the home every day for a week then introduce yourself at the open house as the guy who drove by every day for a week, the listing agent may internalize negative feelings about you. This won't help.
- Use escalation clauses. "Buyer will pay $2,000 over any other offer up to a maximum of $400,000." This shows you're serious enough to beat most other offers.
- Don't use escalation clauses. Some sellers (and their agents) hate them. They make it look like you're trying to win while paying less than you're willing to pay. Can come across as a bit weasel-y.
- Ask the listing agent how they feel about escalation clauses! If #33 and #34 seem like opposites, it's because they are. The best way to know which is better is to ask! While writing this article, I helped my seller negotiate an escalation clause. The buyer was willing to go up to a maximum of $285,000 so we simply counter-offered the maximum and it was accepted!
- Offer to dispose of seller's trash. When sellers move, they throw away lots of things. Consider including, "Seller may leave any personal items in the home for buyer to keep or discard." This lessens the anxiety (and expense/time) involved with cleaning out a home for a buyer before closing.
- Offer a rent-back (use and occupancy) agreement. Sometimes sellers need to sell to receive their money but don't have a place to go yet. Offer to buy the home, then allow the sellers to use and occupy the space for whatever amount of time they need. You can charge them rent, or let them do it for free. Do what makes you comfortable while also winning the home!
- Use an agent. If my seller is going to sell their home for hundreds of thousands of dollars, we need to know that the buyer or their agent is an expert in real estate. A good buyer's agent will know whether or not they can truly get from the offer to the closing table without issues. A buyer that does not have an agent will fill out forms wrong, not know what the standard timetables are for different steps of the process, and generally forget minor details. It's the minor details that make a deal blow up the day before closing and no one wants that! Your offer will need to be considerably better in price and terms for me to recommend to my seller we even think about taking your offer if you don't have an agent already because you are inherently riskier without a licensed professional on your side.
- Work with my team. We are the #1 team in the state for a reason! Don't be fooled by marketing or brand names; work with the team that can stand behind their performance. If the goal is to buy, sell, or invest then use the team that has literally done it more than anyone else!
