Home Buying: Writing a Strong Offer

Dated: February 15 2021

Views: 484

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:

See the source image

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!

Blog author image

Sullivan Group Real Estate

Julie and Morgan are a mother-daughter duo and owners of Sullivan Group! We are experts on the cities, towns, and neighborhoods as well as closely connected to the people who live within those limits.....

Latest Blog Posts

Thinking of Buying? Now May be the Time!

There are more homes for sale today than at any time last year.So, if you tried to buy a home last year and were outbid or out priced, now may be your opportunity. The number of

Read More

Building Weath through Homeownership

The link between financial security and homeownership is especially important today as inflation rises.  But many people may not realize just how much owning a home contributes to

Read More

How being a homeowner defends against Inflation

If you’re following along with the news today, you’ve likely heard about rising inflation. You’re also likely feeling the impact in your day-to-day life as prices go up for gas,

Read More

Is 20% down payment required?

As you set out on your homebuying journey, you likely have a plan in place, and you’re working on saving for your purchase. But do you know how much you actually need for your down payment?If

Read More