HOW TO MAKE THE WINNING OFFER WHEN YOU FIND THE HOME OF YOUR DREAMS
Imagine this if you will: You’ve been searching for a place to call home and after seeing a dozen houses you finally found the one you just can’t live without. But the real estate market is on fire. Competition is steep. There is a high chance there will be multiple offers in a matter of hours, not days. This is the reality of the Houston real estate market today. So how do you win? How can you make sure the sellers choose your offer over everyone else’s?
HIRE THE RIGHT AGENT
I can’t stress this enough. Who you hire matters! An agent can make or break a deal. Hire someone who knows the local market conditions, is competent to write complete contracts, has a positive attitude, a good reputation and good communication skills. An agent should know how to negotiate offers and get you the best deal possible, and should also know tricks to the trade that can make the entire process as stress free as possible.
If you find yourself stuck on how to find the perfect real estate agent to work with, check out the video and article we did covering just that; How to find the perfect real estate agent.
PRICE ISN’T THE ONLY FACTOR
One thing buyers and their agent need to understand is that price is not the only determining factor when sellers choose to either accept or reject their offer. In fact, many times I have seen sellers choose an offer with a lower sales price over another offer with a higher sales price.
For example, if you gave the seller a full price offer, but request $10,000 in seller contributions, was it really a full price offer? No. It wasn’t. You basically just offered the seller $10,000 below their asking price.
Here are some items that can sweeten the deal for a seller and make your offer stand out like a purple cow…
Days to close – Are you financing or paying cash? Can your lender close faster than the average 30 days? If you are paying all cash, can you close in 7 days or less; assuming the seller can accommodate a fast close.
Closing costs – Do you need assistance with closing costs? It’s not uncommon to ask the seller to contribute, but you should know the market conditions before asking. If it’s a super-hot market, it may be best to not ask them for any contributions. Right now in the Houston area, we are seeing buyers offer higher than asking price and then ask for closing costs. Anything less, your offer may not get accepted.
Home warranty – This one goes hand in hand with closing costs in a way. Home warranties cost around $600. Are you asking the seller to pay for it?
Option period – This is where you can risk it for the biscuit! Are you a seasoned home buyer or remodeling expert? Then you can consider waiving the option period all together or shorten it to something like 3 days for you to perform an inspection. If you aren’t knowledgeable on the potential risks involved, I highly advise against waiving the option period. However, you can put a high dollar amount rather than the industry average of around $200 and shorten the length. If you don’t know what an option period is I will link to the video covering option period here.
Pre-approval letter & a special call from your lender – When submitting an offer, the first thing you should already have handy is a pre-approval letter that states that you have been properly vetted by a mortgage lender. Local lenders typically have a better reputation than online lenders, so choose wisely! Also, the lender you choose can add a nice touch to the offer by calling the sellers agent directly and reassuring them that you are well qualified. Check out a video we did covering the pre-approval process.
Understand the situation – Here is where hiring the right real estate agent helps you get an edge over other buyers… know the current market conditions and whether this home you are after is about to fly off the market or sit for months. If your agent knows the house will have multiple offers within hours, you can’t wait around and think on it… you need to act fast! See our latest video where we talk about what happens in multiple offer situations.
Another part to this section is understanding the sellers wants and needs. This is also where it is important to have a great agent. Is the seller in a bind financially or have they already moved out and the house is vacant and they are paying 2 mortgages, so they want a quick closing or maybe they haven’t even found a house to move to yet and need extra time to move out of the house after closing? Understanding their situation and what they are looking for in an offer helps you and your agent make a more appealing offer.
I hope now you understand making the winning offer is about so much more than just price alone, especially in a competitive area like the Houston real estate market. If you want to know more about the buying process be sure to check out our latest videos and articles we publish weekly. And don’t forget, our team is always here to answer any questions you have.