Pittsboro Real Estate Broker Eric Andrews discusses tips on how to make a strong purchase offer in a competitive market. In 2021, we are definitely experiencing a very hot market with homes selling above appraisal prices and with multiple offers. Here are some tips to strengthen your purchase offer:
1. Use an experienced broker or buyer’s agent
2. Find out if the seller is looking for anything in particular such as a fast close
3. Use a significant amount of Due Diligence money and include the check with the offer
4. Don’t cause waves by asking for personal property
5. Include a personalized letter
6. Allow sellers to stay in the house after close
Speaker 1: How could a buyer strengthen their offer?
Speaker 2: That’s an excellent question to ask because right now, this market is super competitive and there are a lot of things a buyer can do to strengthen or enhance their offer. First, it’s real important that you deal with a good, experienced, knowledgeable broker. And that broker should be calling the listing agent and saying, not, “Did you get a permit for the attic?” Or, “Why is there a funny smell in the basement?” Seriously, that is going to be the difference between you being chosen or not chosen. But if that agent calls up the listing agent and says, “Hey, I know you’re super busy. I know you got multiple offers. Is there anything in particular your sellers are looking for? Well, they want their daughter to be able to finish high school. So if it was a two month close, that would be better.” You now have inside information to set your offer apart from others or whatever.
Or “This is a divorce they want this done as quickly as possible. We’re looking for the quickest close.” You still have something. But don’t make it adversarial. This is a popularity contest. You want that agent to want to work with you. You can say little things, “I saw the roof was older, we’re not concerned about that. I saw the HVAC was older, we’re not concerned about that. The only thing that we saw was the carpet in the living room and her uncle owns a carpet store. So we’re going to take care of that.”I’ve overcome all the possible future objections. This agent’s going to want to work with me more.
But there’s still more things you can do. Certainly due diligence, money makes a difference. So if you have an offer with like 500 or a $1,000 due diligence money, or if you have an offer with five or $10,000 due diligence money, sellers are much more inclined to go with that heavier due diligence money. Now that money’s at risk, you lose it. But if you want the dang house, that’s how you get the house, is by throwing a lot of due diligence money.
Speaker 1: I tried to buy a house once and the agent told me I could just mail the check in later.
Speaker 2: So we are in a COVID world right now, and we are in a high tech world. And there are a lot of electronic signatures and we’re boom-boom, zip-zip-zip. But you know what, I sold 60 last year and I’m not too busy to drive to the office or to meet with the agent in Wilsonville and say, “Here is my offer. Here is the check.” Or at the very least, you want a copy of the check with it and say, “Susan, I know I’m not giving you the check right now because you’re so busy and we’re in a pandemic, but I have the check. This is real.” Because that’s just one little thing. I mean we’ve had deals where I had a deal last year where the seller never, or excuse me, the buyer never delivered the due diligence money. We’ve had it where it’s happened several times to several listing agents. So to have the money in hand is hugely important.
Don’t muck up an order. Are you going to ask for a home warranty? Seriously, you’re in a competing situation and you’re going to ask the seller to pay five, 700 bucks for a home warranty? No, don’t do that. You’re going to ask for the refrigerator? You’re going to ask for the grill? You’re going to ask.. I mean, if you are competing, you want to make this as simple and as smooth as possible. So, don’t cause any waves. Now, some people have been writing letters. We want to make sure that we’re not violating any federal policy. You can’t have pictures of you and your family and the kids. And so that would be a violation. You can’t say my wife and kids would love this property, DA-DA-DA. You’re supposed to be neutral. So there’s a mixed bag as far as the letters concerned.
But you know, I’ve had the sweet little old lady as the seller and they read the letter and they so much liked what they saw in that letter. I mean, seriously, a guy writes a letter and says, “I’m going to buy this house because I want to rent it and get some rent money.” Versus, “We love your backyard. We want to raise a family someday there,” or whatever. That’s probably not legal, but you just say, “We love the backyard. We can imagine spending time in the backyard and having barbecues.” That is a stronger visual image than something really, really cold.
So, there’s so many different ways, due diligence money, not asking for personal property, a quicker close, but maybe even a longer close is what those people are working for. And one of the best things that we’re seeing right now, and this is so anti what we’re used to as real estate agents, but allowing the sellers to stay in the house for a week. So many people are like, “Oh, what do I do when it’s closed?” I’m like, “You need to be out. They need to do a walkthrough like the day before or the morning of you need to be moved. Well, what if it doesn’t close? Sorry. You got to be out of there. Those are the rules.” And that causes a lot of anxiety. But if you tell the 65 year old couple, “Oh don’t worry, Mr. And Mrs. Smith, you can take 30 days to move out.” Maybe your lender won’t let you do that, but if you can do that, your offer is going to be considered much, much stronger than your competition.