Egypt Sherrod’s Making an Offer In a Seller’s Market
The moment of truth has arrived. With the help of your real estate agent, you have finally
found the house of your dreams. The next step of your journey to becoming a
homeowner is to make a formal bid, also called an ‘offer.’
Keep in mind, however, at this stage you may not be the only one making an offer for the
house. There may be another bidder, or several others if you’re in a hot real estate
market, and you will need to make your offer count.
Here are five tips to help you improve your chances of winning a bidding war:
Have all your paperwork in order. Sellers want to know where your money is
coming from. Have your pre-approved mortgage eligibility letter ready so the
seller can learn what amount you have been approved for. If you intend to pay
cash for the house, you will need a proof of funds letter or bank statement
verifying that there is enough money on the account.
Forget lowball offers. If there are other offers on the table, coming in low may
be a very risky play. Make your best offer now. Your agent can provide you with
information on recent sales prices of comparable properties in the neighborhood.
Go for the personal touch. Try to separate yourself from all the other paper
offers with a personalized approach. Writing a letter to the homeowner in which
you explain why you love the house so much will familiarize you to the seller, and
this could increase your chances of success.
Eliminate or reduce contingencies. If you have substantial cash reserves on
hand showing that you could in fact purchase the house outright in lieu of getting
a mortgage, then this could make you more attractive to the seller. Translation:
Don’t hesitate to leverage your cash position to make it a more attractive offer.
Be flexible. Show that you are flexible on the terms of the agreement as it may
give you a leg up. For instance, letting the seller determine the closing date can
help the seller feel more comfortable about working with you.
It’s in this stage of making a binding offer that you should consider including a real estate
attorney on your team of professionals. For a routine home purchase transaction, your
real estate agent will have sufficient knowledge to guide you through the process. But
what about buying a property that could potentially have clear title issues? What if you
found your dream home as part of an estate sale? Wouldn’t you rather be safe than run
the risk of unforeseen legal obstacles later?
Hiring a real estate attorney will typically cost you between $800 to $1,500. Sure, that’s
another expense, but think about the hedge you are getting for this money against future
potential expenses and liabilities. Your real estate agent will probably have worked with
many different attorneys and can give you a couple of referrals. You can always ask
colleagues at work, friends or anyone else who has recently purchased or sold a home
in your community.
This was the seventh article based on my book Keep Calm…It’s just Real Estate. Stay
tuned for more great tips from the eCommission team and myself!