We’re seeing it over and over again in Greater Boston and beyond, a well qualified home buyer getting beat out in a multiple offer situation. Unfortunately this has become more commonplace in today’s inventory-lacking market. Rates are still low and people are not trading up or trading down, still recouping lost value from the market crash which is causing a lot of frustration for buyers.
Utilizing specific language or waiving certain customary clauses in your offer may drastically increase your chances of having your offer accepted. Here’s a few pointers to at least take into consideration. While there are certainly more ways to improve your offer, here are the most common.
While your agent and lender may have different opinions regarding your downpayment depending on your financial situation, there’s no doubt that number can make or break your case to a seller. Despite the fact that two potential buyers may both be equally qualified for a loan, more often than not a larger down payment will beat out a lower one if all other terms are equal.
A good buyer’s agent will always caution against waiving a home inspection, but a Seller and Seller’s agent loves this situation. Our advice is to never to waive that inspection unless you’re okay with taking on the liability of potential problems, or you’re a contractor . Otherwise you can end up in hot water pretty quickly. That being said, there’s a way to make your offer more appealing while also limiting your liability. A savvy buyer may limit potential renegotiations with the seller post-inspection by including a clause in their offer that basically states; “The buyer will not renegotiate material defects found in the home inspection up to $X.” (That figure is variable and depends on individual situations so consult with your buyers agent and attorney for specific language). Language like this immediately gives confidence to a seller when reviewing offers. While the buyer assumes some of the rish, they know if there’s anything serious that the seller will have to take those things into account or risk having to put their home on the market with known issues.
Often times we don’t have it, but sellers love flexibility. Even more so when the seller hasn’t found a place to live post-sale of their home. While the buyer should always consult with their agent and attorney on language in an offer, adding a like clause lets the Seller know that you’re serious and will be willing to work with them cooperatively.
Letter to Seller
We’re seeing more and more letters addressing our sellers on a personal level with offers. It allows people to establish connections and what we find is most people care. Regardless of whether the offer is accepted or not, it definitely helps the buyers position and is a great compliment to the offer package.
Cash is king. Very rarely do we see a financed offer beat out a similar cash offer. There are roadblocks to financing like credit, job security, appraisals, etc. while they don’t exist in a cash sale. Proof of funds are presented and the rest of the deal usually goes smoothly. A large percentage of deals in Massachusetts were cash last year and many of those purchases were by foreign buyers. If you’re fortunate enough to have it, use it.
A pre approval isn’t a guarantee that a lender will give you a loan, but it’s a very important document regardless, especially to the seller. I would safely say it’s paramount that a buyer have a good pre approval from a reputable lender. I say reputable because some approvals are not worth the paper its printed on. Do your research or ask for advice as I won’t bash any particular company. It’s also important to know that a pre qualification is not a pre approval. You actually want to speak to a lender directly for it and provide your necessary information. Internet forms you can fill out and provide some information to generate a form are convenient, but not the real thing.
(Mike DelRose Jr. is an agent with the Mike DelRose Team, a RE/MAX Leading Edge franchise based in Watertown, www.mikedelrose.com)
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