This is hard to answer because every seller is different...some are looking for the top price, others are looking for the strongest cash position, still others care more about particular time frames and conditions.
Bidding wars are unfortunately here again and all too often, the first time buyers with FHA and VA loans are getting shut out.
How bad do you as the buyer want the home? Is this a long term investment? Do you see this as being your "forever" home? What life events would cause you the sell the home?
All questions to ask yourself before putting together your offer.
That said, a seller wants the best price possible. So the highest purchase price will be the first thing their attention is drawn to. Next is the terms of the offer - is it an all cash offer? That is the most preferable. Is it financed? If so, is it within a 30 day time frame? If it is financed, does the buyer have a substantial down payment, preferable even more then the general 20%?
Are they offering us any sort of credit - maybe a free 30 day rent back?
Sellers want the best overall offer - IE the best combination when it comes to the price, the terms, the time frame, and the liklihood it will all work out just fine. No seller wants to work with a buyer who has backed out of 3 properties or who has a strategy of re-negotiating on inspections ...
The second best way to win a bidding war is to listen to your agent. Every week during our office meeting we discuss "the deals we missed" and the common refrain on the buy side is "they didn't listen to me". Agents know the market and know what it is going to take to win a deal with what you have to offer. Listen to your agent.
The flip side of that is that as agents we have to do a good job of getting our clients educated on the market conditions and to understand why they should do x, y, or z. While there are some people who are going to insist on doing everything their own way, regardless of a preponderance of evidence to the contrary, I generally view the "they didn't listen to me" comments as a failure on the part of the agent.
Well, there are several, but each situation is unique. For example, some sellers may want a free rentback, long close, etc.
1) Ask what the seller is looking for in addition to a top price (free rentback, etc.)
2) Run your comparables to see where the area offers are heading
3) Write a clean offer
4) Communicate with the listing agent about expectations on things such as contingency length
1. Offering a competitive price. This is obvious, not every buyer is well coached on this. Study the comps with your agent and keep in mind that in a low inventory market, many new listings become the "new comp" for the neighborhood. Always offer a price where you're either happy to pay it, or lose to someone who will pay more.
2. Sign the disclosure package. This makes your offer stronger and shows commitment.
3. Do your inspections before making your offer. Not having an inspection contingency is a surefire way to make your offer stand out.
4. If you are not paying cash, be sure to go all the way through underwriting when getting pre-approved for a mortgage. This allows you to write a cleaner offer and showcases your ability to close the transaction.
5. Write a letter to the seller. This doesn't always work, but sometimes it helps. If you are in a competitive situation, you might as well give it your all.
We can do: FHA, Conventional, USDA, VA, HARP, Interest Only, Home Equity, Fixed, and Variable. Find out which product is right for you by calling Brad at (855) 415-5626.
Sr. Loan Officer
Crosscountry Mortgage Inc.
Toll Free: (855) 415-5626 ext. 5734
That is not always cash.
It's not always the hightest price.
Some will alllow months to pass to accomidate the offer that embraces what they, the seller, values most.
With such limited information as suggested by the question, one must make assumptions and respond based on these assumptions. Reality is so much differant.
You win the bidding war by not engaging in it, and making the CORRECT value offer.
The details are worth paying for.
You want termite inspection and treatment and the bank or seller paying for it - comes from sellers bottom line, but also a delay in closing period. Want septic system or well inspected - time is money to the seller/bank.
If both a cash and financed offer are exactly same terms - cash will many times speak a little louder, but I am noticing banks are wanting higher earnest money and per diem from cash buyers.
The cleaner the deal - in any home transaction - the better.
First of all I encourage my clients to make their best and final offer from the start. If their best is not godd enough , I urge them to be prepared to move on.
Some thins can be done to make an offer stand out in the crowd are:
1. Shorten alll contengency periods
2. Have your agent write a letter on buyer's behalf, one that will personalize the buyer to the seller.
3. Give your lender permission to convey/release information regarding the status of your loan approval process to the listing agent. This permission should be in writting. Make sure and submitt copy of the written permission with your offer.
4. Use conventional financing, if the buyer can. Some sellers will give more weight to an offer with conventional financing vs. FHA financing.
5. Buyer should have a down payment, sellers will favor an offer with a buyer with a down payment.
Kawain Payne, Realtor
99% of the time it comes down to price, but there are occations where the above works.
Good question, if we knew we could always get our offers accepted everytime we could bottle it and sell it for a fortune:)