High prices. Bidding wars. Buyers texting offers while driving away from the open house—then again at the next stoplight. Welcome to a seller’s market. Some buyers feel the only way they can compete is to make it rain—toss the biggest offer possible at a seller, hoping they’re captivated by the cascade of cash. Getting a good deal in a seller’s market may seem daunting, but we have some advice to make it happen. Here are five things you can do to get a seller to accept your offer—even if you wait until you get home to send it.
1. Get Pre-Approved for Financing
Pre-approval, especially in a seller’s market, is a must. The pre-approval process involves your mortgage officer taking down some basic information about you and your finances and then telling you how much you can afford. The best part is they put it in writing, so you can brandish it to sellers, showing your talk isn’t cheap—you can walk the walk.
Pre-approval gives you the attractive label of “qualified buyer.” For a seller, this speaks volumes: Not only do you have the financial muscle to afford their home, but you also have a bank at the ready to facilitate a smooth closing.
Hint: Homie Loans™ can be your solution to finding the right mortgage for the right rate. Click here to learn more about what they can do for you.
2. Consider an Escalation Clause for Your Offer
For buyers, an escalation clause makes buying a home a lot like bidding on an item on eBay. Your bid goes up automatically when someone places a higher bid than yours. You set a limit on how high your next bid will be, as well as how high you want to go. Escalation clauses come with multiple advantages:
- You don’t end up bidding yourself out of your budget.
- You don’t have to keep making bids, one after the next; they’re automatically escalated for you.
If a buyer you’re competing against doesn’t have their own escalation clause, they may suffer from bidding fatigue and back out after a few rounds.
You can make additional bids quickly and automatically instead of spending a day or more contemplating what the next bid should be. This way, you can get an attractive bid in to the seller early, which can help close the deal in your favor.
3. Offer Flexible Options for Taking Possession
Make it easy for a seller by giving them extra time to move out. Whether the seller is trying to close on a new house of their own, transitioning to an apartment, or going back to their parents for a few months, moving is often easier said than done. In a seller’s market, their house may go a lot quicker than they thought, throwing a big wrench in their relocation timeline. Here are some ways you can offer flexibility to make your offer that much more attractive:
- Offer a flexible closing timeline. After the house has closed, the seller will feel pressured to fork over the keys, but they may not be ready yet. Allowing the seller to dictate the timeframe for the closing can put their mind at ease and sweeten your offer.
- Offer an extended possession. With an extended possession agreement, you still own the property after closing, but the seller is allowed to remain in the home for a designated period of time. To give you, the buyer, some security, the seller can deposit money in an escrow account—anything from a couple thousand to some serious stacks. If they default on when they say they’re going to move out, they risk their escrow deposit, but you still maintain ownership of the property. Not a bad deal for you and for an honest seller, they literally get to buy some extra time.
- Offer a leaseback agreement. With a leaseback, you lease the home back to the seller after taking ownership. Essentially, they go from selling to you to renting from you. Not only can this provide you with some extra income, but it gives the seller time to ease their way into their next home. The added convenience can make your offer stand out against those of the competition.
4. Offer to Buy the Home As-Is
Buying a home as-is may also sound like something from a home auction show, but you can still be protected while reassuring the seller of a smoother closing. With an as-is offer:
- You agree to buy the home if it satisfies some basic due diligence requirements, such as being structurally sound, free of termites, radon gas, and other health and safety issues.
- You’re telling the seller you won’t be sweating the small stuff, which may include things like:
- An HVAC system that needs to be tuned or updated
- Doors that may not close properly
- Windows that are out of plumb
- Damaged wood flooring
- Old, worn carpet that should be removed
You can also agree to ease the burden of their move by taking care of some stuff they may not want to invest the time or energy into getting rid of. These may include:
- Bulky hutches or armoires
- Collections of old items
- Beds and bed frames
- Broken appliances
Often, you can flip these items online for a quick profit—or lug an appliance to a metal scrapyard and sell it to them for a few bucks.
5. Write a Personal Letter
For some folks, nothing helps them reach for their pen faster than an emotional appeal. So feel free to bust out a four-page letter explaining why you love their house and how it’s a perfect fit for your family. It can be awkward to get in your feels during a business transaction, but sharing your story can help add personality to the six—or seven—figures in the offer. This way, you give the sellers something to talk about over the dinner table and at their next cocktail party. Closing a deal is great, but for many people, making someone else happy is something money can’t buy.
How Homie Can Help you Get a Good Deal in a Seller’s Market
Even in a seller’s market, you don’t need to make it rain to get your offer accepted. By using pre-approval, an escalation clause, flexibility, an as-is offer, or a personal letter, you may not have to shower sellers with as much cash to close a deal. In this way, you incorporate strategy, flexibility, and some common courtesy to get a good deal in a seller’s market.
Homie can help you buy your next home and pay less. With Homie, you get as much as $2,500 credited to you* to put toward closing, moving, or furniture. You can enjoy a stress-free process with a dedicated real estate agent who can help craft the perfect offer on your new home. Reach out now to learn more.
*Buyer credit subject to lender approval and buyer agent commission. See full terms and conditions in buyer-broker agreement and agency disclosure.