I’ve read a lot of expert opinions about how to write an offer that “stands out” in a multiple-bid situation.
So far, nearly every one of these opinions describes doing the exact same thing everyone else is doing. Not that that’s a bad thing. In most cases, they’re all doing it because it’s the minimum standard.
- Offering at least 1 percent of the proposed sales price as earnest money. Less than 1 percent and the seller will believe you aren’t financially secure. Earnest money is not in addition to the down payment for your loan, so there’s no reason not to have some significant skin in the game.
- Be pre-approved for a mortgage with a reputable lender who can be reached easily via phone or email. If the sellers can’t verify your data, they won’t be choosing your offer.
- Keep your contingencies to a minimum: Don’t condition the sale on too many things that might not happen; it’s too much like waiting for your ship to come in or a relative to die.
- Corollary to #3: Keep your inspections to a minimum (no one wants to see a long list of tests to be done on the house. )
- Allow the seller a few days after closing to finish moving out.
- Be nice. No seller wants an offer that whines about the condition of the house and suggests that the seller is lucky to get such an offer as yours. Also, do not attempt to negotiate repairs in the initial offer. You have an inspection period for that!
All of the above are basic to offering in a seller’s market.
If you want to stand out, something truly thoughtful is called for.
- If you offer more than the asking price (and if there are multiple offers, you should), be prepared to help cover an appraisal gap, should the appraisal come in low. Otherwise, the seller’s likely not to get that extra money anyway.
- Help pay the seller’s closing costs. Doing so will net the seller more money without causing appraisal issues.
- Give the seller time to move out for free. Most everyone will offer the seller some days to “rent back” the house from the buyers for a few days after closing to finish packing, but FREE days are special. And since you won’t start paying on your new mortgage for several weeks, it’s a painless gift.
- Offer to shoulder the first, say, $2500 in repairs.
- Pay for a moving van or a couple of muscle-bound folks to help the seller move. This is especially effective if the seller is single or elderly.
- Offer to take or get rid of any furniture or junk the seller does not want. A lot of hand-wringing comes from the specter of moving giant armoires or entertainment centers or disposing of old paint cans. If the seller is down-sizing, he or she might like not having worry about those.
You may be wondering, looking at the list, how on earth a buyer would be able to afford to do these things if he is already offering at the top of his budget. Easy. Don’t offer at the top of your budget–aim at houses priced well below your top dollar and you’ll be able to be generous.