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The closer we get to the summer home-selling season, the hotter the real estate market gets. Recently about one-third of homes nationwide sold in less than 30 days. Homebuyers are having a tough time simply making offers before their potential dream homes are snatched up by other buyers.
We asked some of those successful buyers to pass on their advice to those of you still vying for a home of your own. Here are some of the most popular tactics plus some additional insights from a couple of Dave’s top real estate professionals.
1. Assure the sellers your financing is rock solid.
Bri R. offered her perspective as a home seller who recently had to decide between multiple offers on her home. The reason they chose the offer they did? “We were assured that their financing was securely approved,” she said. As a former mortgage loan processor, Bri said she’d seen plenty of deals fall through, even for buyers with pre-approval letters.
Ryan Edwards, a real estate agent and Endorsed Local Provider (ELP) in Alabama, agreed with Bri. “There are a lot of Internet lenders that will give just about anyone an approval letter,” Ryan explained. Buyers can reassure sellers by working with a reliable, local lender for their mortgage. “Having a letter from someone we work with locally who is trusted goes a long way.”
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Buyers can go the extra mile by offering earnest money with their bid, Charles Keener, ELP in Arkansas added. Earnest money is a deposit you make as a pledge to the buyer that you are truly interested in buying their home. It’s traditional to pay 1–2% of the home’s purchase price as earnest money, but according to Charles, “Bigger is better.”
A higher deposit not only shows you’re serious about buying the home, it also demonstrates your ability to pay for it. Your earnest money will be applied to your down payment or closing costs. And don’t worry. Even if the deal falls through, in many cases you can get most of your earnest money back.
2. Bypass the move-in-ready and look for homes that need some TLC.
Jennifer C. recently bought a home in the hot Seattle, WA, market where she was competing for homes with as many as 20 offers for $80,000–120,000 above asking price. How did they do it? “We looked past some outdated features and looked at neighborhood, layout and livability first,” Jennifer said. “While everyone else was fighting over the shiny remodel, we snagged a great home with ugly carpet.”
Charles said this is a great strategy for the right kind of buyer. “Most buyers grew up with a fast-food-my-way mentality,” he said. “Buyers willing to put in the extra work to make repairs will get a better long-term value.”
“In our local market, the older homes are in neighborhoods with large lots and mature landscaping,” Ryan added. “A lot of buyers prefer that to new construction with smaller lots and fewer trees.”
Buyers with the time, energy and budget to put some sweat equity into their next home may face little competition, but there are exceptions to that rule. “If the home is in a killer location, even a dump may cost quite a bit and have multiple buyers,” Charles warned.
3. Include a personal letter to the homeowner with your offer.
Several homebuyers said they believe this move is the reason their offer beat the competition. “We sent the sellers a handwritten letter with our offer,” Melanie G. said. “They received multiple offers but said that our letter added a personal touch and set us apart from the rest. They accepted our offer within 24 hours.”
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Our real estate experts agree that a letter to the seller can help, but it’s not a sure thing.
“It can help you hit a common chord with a seller,” Charles said. “It’s a tactic I’ve seen work, but certainly not regularly.”
Ryan said he’s only recently been involved with home sales where the offer to purchase came with a letter. “The seller read the letter, but honestly, it did not affect their decision with the offer terms,” he said.
In other words, a personal letter probably won’t hurt your chances, but you will still need to make a competitive offer to even be considered.
4. Work with an experienced agent you can trust to stay on top of your home search.
“I got my dream home because I used an experienced agent who understood the market where I live,” Meghan C. told us. Her agent was quick to notify her when homes in her preferred neighborhoods went on the market. “We were always the first ones to see the houses because my agent was so on top of things!”
Morgan A. said his agent found his new home before it even hit the market. “Our agent’s business partner had just sold a home to a couple who still needed to sell theirs,” he explained. “We jumped to get a tour and signed our offer 20 minutes later.”
If you’re not working with a high-octane agent who’s got what it takes to close the deal on your new home, we can help you find a real estate professional in your area who does. Like Charles and Ryan, every ELP has earned Dave’s recommendation for excellent service and great advice. Find your ELP today!