In a market with a shortage of inventory, winning the offer takes craft and strategy. Here are five tips to help you write a strong offer.
1. Get a pre-approval letter from a reputable lender with as few conditions as possible.
Sometimes I get a “pre-approval” letter from a buyer with so many conditions, it is barely worth the paper it is written on. A good lender will send the buyer through their “desktop underwriting” system, verify their credit and sufficient funds to close BEFORE issuing the pre-approval. The strongest letters have the following conditions:
- Satisfactory appraisal.
- Satisfactory title work.
- No change in employment or income.
2. Don’t have your lender write the letter for exactly the amount of the offer.
There’s this myth out there that if your pre-approval letter is more than the amount that you’re offering, the seller will automatically counter. This is not true. What is does is make you look like you’re buying at the top of your price range and a possible financial risk. A seller may move on to another more qualified buyer without even countering.
Your pre-approval should be for a little more than your offer. Nobody can make you pay more for the house than you’re willing. Having a pre-approval letter a bit higher than your offer amount shows you are very well qualified.
3. Do not include the seller’s personal property in your offer.
Keep in mind you are buying real estate. Keep the items included in your offer limited to what the seller has included in the listing. Asking for other personal items can force a rejection if the seller is unwilling or unable to include them.
4. Take your agent’s advice on offer amount.
With the average sale price currently 97% of the list price, be reasonable in your offer amount. In a seller’s market, a fairly priced home will sell quickly. Offering low could insult the seller and make them counter higher than they would have if you had been reasonable. It could cost you in the end.
5. Don’t ask for “Seller Concessions” if you don’t need them.
In a competitive market, a seller can be choosey. Even if you aren’t competing with other offers, the seller may hold out for a buyer with a conventional offer who isn’t asking for concessions.
Ultimately, these five points are the foundation to writing a good offer, but each situation is different. A good agent will be able to advise you on your specific offer.
If you are looking for solid representation, we can help. Welcome to The Integrity Team. You belong here.