How can you sweeten an offer on a home?

Asked by Trulia Denver, Denver, CO Mon May 6, 2013

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14
cindilakes, Home Owner, Denver, CO
Tue May 7, 2013
You know I read all these answers with great interest, as I have been trying to purchase a home in Denver since last summer and have not been successful yet. :( Quite a few of the answers seem to hinge on the cooperation of the sellers agent, but we never find that to be the case.We struggle with agent's that have their own agenda in wanting to sell the house to their own client and try to talk you out of even sending an offer because their client is ready to accept an offer they have. Agent's that don't return emails or calls in a timely manner, which when houses sell in hours within listing makes a difference. Yesterday I lost bidding on a house because even though it was the very 1st day on the MLS, there had been a "coming soon" sign in the yard, someone had contacted the agent, already seen the house and made an offer that day. I have a daughter with chronic health problems that has a son 1 1/2 years old, my first grandbaby, she really needs my help to be out there for her during rough times, plus I am missing him grow up. Does anyone think a letter would help in my situation? How much earnest money is recommended? And yes, I am pre-qualified. I have offered more than the purchase price first time out. Any other advice?
1 vote
Nicci Hyatt, Agent, Denver, CO
Mon May 6, 2013
It also helps to have a Buyer Broker who has a good reputation and a solid track record. Reliability and the ability to GET a contract to the closing table is where we really earn our chops - and having a well-respected Realtor can make a difference when offers are close.

Writing a sweet letter to seller is an old favorite, but when it comes down to it, money and the ability of the buyer (and their agent) to get the deal to the closing table will always trump anything else.
1 vote
Tony & Karen…, Agent, Denver, CO
Tue May 7, 2013
That sounds pretty frustrating, for sure. Especially the part about the listing agent not wanting you to make an offer, so the seller would buy from his own client. Definitely some cross purposes there!

Are you working with an agent representing your interests? Having a buyer's agent is actually free to you, and it would probably serve you much better than trying to work with the listing agent directly. When someone acts as an "agent" on your behalf, they are held to a much higher standard in working for your interests. In Colorado it's illegal to claim to be an agent to both sides in a transaction, so if the listing agent is writing up your offer they are truly unable to promote your interests as much as if you had someone in your own corner. And remember, the services of a buyer's agent are normally paid by the seller - so it's absolutely no cost to you.

Earnest money is usually set be the seller. If you can put more down it might demonstrate that you're more committed to seeing the transaction through. Most people just provide the specified amount so that may help you to stand out.

If you're not already working directly with a buyer's agent, feel free to give us a call so we can help.

Tony & Karen
720-427-4836
0 votes
Mike Papanto…, Agent, Arvada, CO
Tue May 7, 2013
If you have a good agent helping you, there are a few different approaches that they can use. I also like the idea of writing a personal note to the seller to accompany the offer explaining why you and your family (if this applies) have fallen in love with the home and how you see yourself using the various amenities such as having bar bq's on the deck, etc.
But, a good agent knows a few different methods on the contract offer to check certain boxes and how to handle the amount of earnest money to make that seller look twice at your offer, even if it isn't the highest offer. You may be able to position yourself to be the best offer.
Good luck. This is a tough market to be buying in. Even worse than only 6 months ago.
0 votes
Robert McGui…, Agent, Denver, CO
Tue May 7, 2013
Cindilakes,

So sorry to hear of your dilemma. What you have expressed is common to the Denver Market at this time. I would suggest that you sit down with your Buyer's Agent and review all of the comments in the posts below. Maybe there is one he has not considered. I actually put an offer in on a coming soon listing last month and got accepted before the showings started. That is a ligitimate approach. Also in your particular situation I would really suggest you have your agent write an intimate and persona letter in reference to you family situation and grandchildren etc. You could write a 'hardship' letter, specially with the health problems involved. Some agents feel is is not professional, but I have seen it work. It can't hurt. Best of success with your purchase and with your family situation.

Robert McGuire
Broker/Consultant
Your Castle Realestate
http://about.me/robertmcguire33
0 votes
Thank you Robert for your answer. I will share with him. And I am ready to write that letter. I would think if you are attached to your home especially, you would want a caring family person in it instead of an investor, just out to make money.
Flag Tue May 7, 2013
Jon Roberts, Agent, Denver, CO
Mon May 6, 2013
Answers below cover most of the techniques I've seen. I recently won a Buyer contract that was $15K less than the best offer because my buyer was a Cash Purchaser and closed in 10 Days. I've found that price almost always wins out, but not always. Recently won another transaction with multiple above ask price offers where my buyer put up Earnest Money in the amount of the Purchase Price. That was convincing (as much Earnest Money as possible is always recommended). Waiving contingencies was mentioned below and also very effective, namely Financing Contingencies if you are confident with getting your loan. I have found letters don't hurt. Another success story I heard (didn't do myself) involved talking to the seller/listing broker and seeing what they want. This seller wanted a longer possession time and Movers. The buyer gave them 1 month free rent and covered their moving expenses. Beat out higher offers. In summation: learn what the seller's hot buttons are and appeal to them.
0 votes
Robert McGui…, Agent, Denver, CO
Mon May 6, 2013
Trulia Denver,

Several ways. 1. A strong lender letter and have the lender call the Listing Broker to confirm. 2. A personal letter about the buyers has actually made the difference in my experience on several occasions over the years since many sellers emotions play a big part in their decisions. 3. A large Earnest Money check sometimes works. And a large downpayment is helpful. 4. Of course cash is still king in many situations. Especially if you can waive the inspection and appraisal. 5. In tight bidding wars sometimes an 'escalation clause' can seeten the deal for the seller.

Robert McGuire
Broker/Consultant
Your Castle Realestate
http://about.me/robertmcguire33
0 votes
Joetta Fort, , Arvada, CO
Mon May 6, 2013
I do have one suggestion I don't think has been mentioned. But it does usually boil down to money. I wonder if any agent can share a story where a letter actually made a difference. My sellers have not been swayed by a letter.

Anyway, the other thing that can sweeten the deal is to allow the sellers a couple of days after closing to get moved out. That can make a a big difference.
0 votes
I actually have several instances where the letter made the difference. It probably wont over come a $5,000 price difference, but if the offers are close, selling a home is an emotional process. Many sellers will use that as the deciding factor when they have a close decision. If they love the home, they like to see someone who will love it equally, or possibly someone who appreciates work they did around the home. It also says a lot about the buyer if they take the time to write the letter. An exact instance was a seller who had 2 offers, close in price, my buyer wrote how she really liked the kitchen, especially the tile work. The seller who was a Dr had lived in the unit a few years earlier and had done the work himself. The listing agent told me that the letter was the deciding factor.
Flag Tue May 7, 2013
Chuck Strau…, Agent, Denver, CO
Mon May 6, 2013
All good answers. Most important is, of course, money, but the sellers looking at multiple offers will sometimes NOT take the highest offer, but will always take the BEST offer. This means one that they can be reasonably sure will close. Waiving contingencies (appraisal, inspection), paying for all closing costs, including title insurance, also helps. Finally, I always suggest the buyer write a letter to the seller explaining why they want the house; if written well, this can also "sweeten the pot". This works both for owner/occupied and investors.
Chuck Strauss
Your Castle Real Estate
720-318-7598
denverhomeguru@gmail.com
http://www.denverhomeguru.com
0 votes
Chris Merman, Agent, Denver, CO
Mon May 6, 2013
I agree with everyone on this blog but remember to keep in mind that there are several other factors that can "sweeten the deal". Price is one thing and (often the most important) but keep in mind that many sellers are looking for favorable TERMS. What I'm taking about here are looking "outside the box" by possibly paying for title insurance, waiving some conditions on purchasing along with having a very strong pre-approval lender with the contact info of the lender involved. There are lots of other ways. If you would like to talk about some techniques I have used to help a buyer get noticed by the seller, please feel free to call me. 303 358 4294.
0 votes
Tony & Karen…, Agent, Denver, CO
Mon May 6, 2013
Having a sharp and personable buyer's agent, who is hopefully able to suss out any special motivations or concerns the sellers may have, can only help. In most cases their main concern is money - but that's not always the case. I've had buyers win the house with a lower offer, because they met other criteria that were important to the seller. But it will vary, and part of the value of your buyer's agent is helping you craft an offer that will appeal to that particular seller.

Sometimes it will be letting them know the home they're leaving will be loved and appreciated. Sometimes it's sharing something about your family or life experiences - or being able to close quickly because you've already got all your financing lined up. Sometimes (many times) it's just all about the money, and an escalation clause may help. There's no one answer, since every seller is different.

Best strategy is to be honest and sincere, have your financing identified and be able to include at least a pre-qual letter with your offer, and be flexible. A few thousand dollars in price may only affect your payment a tiny bit. Demanding that simple repairs be made, when you could have them done yourself afterwards, could cost you the home you love. And learn to ignore and look past bad paint choices! ;-)
0 votes
Bill Pearson, Agent, Denver, CO
Mon May 6, 2013
Well I must say that money has been the motivating factors for my sellers so far...with regards to my buyers, I tend to talk with the listing agent and try and get a feel what is going to motivate the seller to pick my buyer. (closing date, no concessions, having a good amount to put down, higher amount for earnest money)

Some sellers like a letter, I guess it can't hurt, but mostly it is about the bottom line for the seller!

Best of luck to you in your transaction!

Bill Pearson GRI, SRES |"Your Denver Realtor For Life"
ERA Herman Group Real Estate| 201 Columbine Street| Suite 301| Denver CO 80206
720-329-1470 |Bill@DenverRealtorForLife.com
5280 Magazine FIVE STAR Real Estate Professional – 2010, 2011, 2012
0 votes
Marge Bennett, Agent, Fort Myers, FL
Mon May 6, 2013
figure out what is important to the seller. Is the $$ or closing time, short or long, would the seller like the continure income from carrying the mortgage? Maybe it's just a family to love the home like they have.
0 votes
Nicci Hyatt, Agent, Denver, CO
Mon May 6, 2013
money, money, money, money, money
You can try other ways, too, but the bottom line is the bottom line. Other options (but which could cause you big issues during the contract process - at least with $ you know where you stand): withdrawing contingencies, such as home inspection, appraisal (but only if you have extra money sitting around to make up the difference), due diligency, free rent-back time, offering to pay for closing costs normally carried by the seller (commissions, title insurance), and having your agent ask the seller's agent if there are any special requests the seller is making.
0 votes
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