Tired of losing offers in a seller’s market? Here are 5 strategies to help buyers win.
In the last two years, buying a home has gone from finding the right house to finding a way to win a bid on a house. And the truth is, people who are the most savvy and flexible are often the ones whose offer ends up being accepted. In light of that, I’ve been talking to my clients a bit more about time and money lately than about the finer points of a home’s HVAC system (although, trust me, we talk about HVAC a lot, too).
1. Borrow Cash From Your IRA - If you have a retirement fund (or a relative!) that can lend you a large sum of money for a short period of time, you can make an offer without a mortgage contingency. You can then get your mortgage after the closing as a cash-out refi and use the proceeds to repay the loan.
2. Get a Pre-Underwritten Loan – Not every lender will do this, but if you can find one who will, I recommend it. Pre-underwriting is basically a step beyond getting pre-approved, in that the lender begins the 3- to 6-week process of scrutinizing a buyer’s financial profile even before their offer has been accepted. Often, even before an offer has been made! Pre-underwriting can significantly shorten how soon you can close. If your offer includes the ability to close in 30 days, it makes you more attractive to the seller!
3. Offer to Buy As-Is - This is also known as “waiving the inspection contingency.” While this does not mean foregoing a home inspection, it does let the seller know that you do not plan to ask them to fix things. If you educate yourself about what it may cost for big repairs – a new roof, for example – or the typical smaller repairs, you can budget for taking care of them yourself after the closing. This alleviates a big hassle for the seller, but more importantly, allows you more control over the quality of work.
4. Base Offers on Current Values - This is where we can all take a tip from ice hockey great Wayne Gretzky, who said, "Skate to where the puck is going, not where it has been.” In other words, if you’re in a rapidly rising market, don’t base your offer on what homes closed for three months ago. Make sure your offer reflects where values will be at the time you go under contract. Sometimes, this can be guesswork, but I try to keep my clients apprised of changes so they can make offers that truly are competitive.
5. Offer a Use & Occupancy Agreement – Some sellers may not want to move before their kids finish out the school year, or they may want to wait until after a planned vacation. Allowing them to stay in the house for a few weeks beyond closing offers them the flexibility to pack and relocate on a schedule that best suits their needs. Flexibility can add value to an offer, and it’s often easy for buyers coming from a rental, who don’t have to worry about occupancy issues around a sale of their own.
Many buyers are not aware of how many resources they can call upon to craft a strong offer. An experienced agent can help you brainstorm your way into homeownership, even in a tough market.
I’m always available to help! Talk or Text: 973-809-5277