What are home sellers looking for when they choose one buyer over another? You may think it is the highest offer, but that is not always the case. The more willing someone is to pay over the asking price, the more demands they may make on the seller. So as a buyer, making and presenting your best offer, even if it is not the highest, could pay off in the end.
What are sellers looking for in an offer?
Sellers want you to be pre-approved for a mortgage.
Money is top of mind for most sellers. But there is more to consider than just who says they will pay the most. Sellers want to see an official pre-approval. Your pre-approval should come from a licensed mortgage lender, and you should have been asked to provide income and asset documentation and have your credit pulled for examination. That is a solid pre-approval as opposed to a pre-qualification. Mortgage Equity Partners takes pre-approval to the next level by offering a fully underwritten conditional loan commitment program. This program will make your offer stand out because even if someone else offers more, they still have to prove they can pay more. Mortgage Equity Partners fully underwritten conditional loan commitment makes a buyer’s financed offer equivalent to a cash offer. As a result, your offer may be next in line should a previously accepted cash offer fall through.
Are you getting a conventional loan?
Sellers don’t want to choose the highest bidder only to find out they can’t back up their offer. A conventional loan is typically reserved for those buyers with a better overall financial picture. Other loan types may take longer to get approved and may require sellers to make repairs on the property. FHA and VA loans often fall into this category. In addition, VA loans may have more strict appraisal requirements, holding up the sale process. While each buyer should choose the loan program that works best for their financial situation, a savvy realtor may be aware of the specifics of some loans.
How much money did you put down for an earnest deposit?
Sellers will often look to see how much money was offered in the earnest money deposit. Usually, earnest money amounts to between 1-5% of the purchase price. By accepting the earnest money deposit, the seller agrees to take their home off the market, make it available for inspections and repairs and provide disclosures to help complete the sale. The bigger the earnest deposit, the more serious the buyer appears.
Do you have to sell your house to buy their house?
First-time homebuyers are in a strong position since they should not need to sell a home to purchase a new one. While first-time homebuyers face many challenges, this is a significant advantage. Be sure your realtor knows that your offer is not contingent on selling another property first and communicates with the seller and listing agent.
Is your realtor on top of things?
In this market, your realtor needs to know the buyer’s deadlines. Many sellers and their listing agents put a deadline for submitting offers. To be competitive, buyers should have their offers ready almost immediately.
What is your closing timeline?
Many sellers have no trouble selling their homes in this market, but the seller today is the buyer tomorrow in most cases. If you want your offer to stand out, make it clear to the seller if you can be flexible on the closing date or if you would be willing to let the seller and their family stay in the home and rent it back from you until they find another place. The best offer, in this case, may not be the highest bidder but the most flexible buyer.
Bidding wars put the sellers in a power position, but if you can be strategic with your offer, you may get the home you want on your terms…or at least some of them. And while you may lose out on being the highest bidder, you could win with the best offer.
