Let’s face it, the home-buying process is stressful. Factor in incredibly competitive market conditions and you may need to book a week at the spa just to get through the next open house.
Never fear, I have you covered. During my many years as a licensed broker in the Seattle area, I developed a few tried-and-true tips that helped my clients’ offers come out on top — even in the most serious bidding wars. (That said, if your offer falls significantly short cashwise, even the most savvy tips might not help.)
However, when similar offers are on the table, there are some strategies that can help you squeeze out the winning edge.
Remember that not everything is about cash
Seasoned agents know that one of the best ways to land a deal in a competitive market is to appeal to the sellers’ nostalgia for their home. Including a short personal letter with the initial offer can make all the difference. It almost seems too simple, but sharing details in an honest and heartfelt introduction letter about how you would enjoy living in the seller’s property may secure your dream home.
Even though the homeowner is moving on, she probably still has a sentimental attachment to the property — so promising to maintain the architectural heritage of a historic home, for example, could make you a more compelling buyer.
Time is money
When a seller considers offers, she views each one holistically. Make yours more attractive by shortening contract timelines. For example, maybe your offer is $3,000 less than other buyers’, but your proposed inspection period is five days shorter. This aggressive timeline shows the seller how serious you are about purchasing her property.
The worst-case scenario for a seller is waiting out a number of days with no forward movement toward closing and then having the buyer back out. Shortening the contract timelines reduces a seller’s risk, adding an incentive for her to accept your offer.
Show them the cash — upfront
Another way to make your offer attractive without burdening your bottom line is to showcase just how earnest you are to purchase the home. Earnest money is a deposit made to a seller showing the buyer’s good faith in a transaction. If a generous earnest money deposit in your market is a set amount of $20,000, then exceed it by another $10,000.
This tactic proved successful in an aggressive bidding war for a condo in the Fremont neighborhood of Seattle. I knew my client’s offer was going to be a bit lower than the others, so I suggested we increase the standard earnest money deposit by $10,000 to show good faith. After all offers were presented, the listing agent called and said, “Your offer was lower than the others, but the large earnest money deposit really appealed to the seller and we’re accepting your offer.” Voilà!
Put yourself in the seller’s shoes and get creative to make your offer stand out. All of these little details add up and can push your offer to the top of the pile.
Calm down …
“I’m so stressed out with this competitive market that I can barely sleep.”
Whoa. Slow down and take a deep breath. I have seen this scenario play out a number of times. If you’re stressing yourself out to exhaustion about every single house you put an offer on, you’re likely to totally burn out and end up agreeing to a less-than-ideal contract detail just to end the process. I received this e-mail from one of my clients a couple of months after her sale closed:
“We were so frazzled after losing 7 bidding wars that once the offer was accepted, we just wanted to get the deal closed. However, I really wish we would have stuck to our original timeline. As you know, our son wasn’t able to begin at his new school with the rest of the class, making it particularly difficult for him.”
This was an inconvenient and avoidable outcome — let’s remember, regardless of what unfolds, this will all work out, so relax and get your om face on.
At the end of the day, even with fast-paced market conditions, purchasing a new home is fun and exciting! So relax, let your agent work his or her magic, and start planning your housewarming party. I’ll be looking for my invitation in the mail.