When we are working with homeowners as they make their decision to sell… the first questions is always “is it even possible to sell my house and buy a new one in this market?”The
Home Buying: Writing a Strong Offer
Dated: February 15 2021
Writing a Strong Offer for Purchase:
The real estate market is very active in most areas of the U.S. right now. This has been caused by historically low interest rates and lower than average housing inventory. Simply put, we have WAY more motivated home buyers than we have homes for sale – eek! This is what we call a Seller’s Market. Home buyers are forced to push the limits of their offer when attempting to purchase a home. Below are a few key points for writing the strongest offer possible on the house you love:
1. Cash. Cash is king in real estate. Coming in with a cash offer is typically the strongest bet! Time frames are shortened when buyers do not have to use a home loan to purchase and the condition of the home is not as crucial.
2. Strong financing. With tons of loan programs available to home buyers, many people can qualify for a home mortgage. However, the strength of your financing plays a factor in the offer scenario – do you have 20% down? Employment security? Cash in reserves aside from down payment funds? Low debt? Good credit? If you can say yes to most of these, you are likely to be as strong as those cash offers!
3. Obtain your pre-approval. Home buyers NEED to have their mortgage pre-approval completed and include a letter from the mortgage lender when submitting an offer. This shows you have taken the steps to confirm your financing ahead of time.
4. Act quick. There are three contingencies in most real estate contracts: inspections, appraisal, and loan approval. Shortening the timelines for each of these contingencies ensures the home sellers that you are motivated to keep things moving forward. Each contingency removed, is a big hurdle jumped to secure the sale of the home.
5. Overpay. Yep, pay MORE for the house. With interest rates at 3% or below, you are likely in a great position to offer more on a house without your monthly payment changing drastically. Every $10,000 increase in purchase price adds roughly $30-40 to your monthly payment. Would you skip one dinner out each month if it meant living in the home of your dreams?
6. Seller terms. Your realtor should do research with the listing agent to learn what terms the seller needs or wants in an offer. Maybe they need more time to get out of the house so a free rent back could be enticing. Or perhaps they did all inspections upfront and request a quick inspection period.
7. Share your story. We always suggest to our home buyers to write a nice cover letter to the sellers. Share a bit about who you are, why you like the house, and the life you envision if that house became your home. Taking the offer from a business transaction to a human-to-human transaction can often make the sellers decision easier!
It is important to remain realistic. Look at homes that are truly in your price range. Offer timelines that are possible for inspectors, appraisers, and lenders to follow. Be open minded to writing multiple offers before the right one sticks. We are true believers that the right home always finds the right buyers!
Julie and Morgan are a mother-daughter duo making up the Sullivan Group! We are experts on the cities, towns, and neighborhoods as well as closely connected to the people who live within those limits.....