Multiple offers are very common. Here are some tips to help you get your offer accepted!
1.) Being prepared and knowledgeable is key. If you are going to finance, make sure you have a pre-approval letter from your lender to accompany your offer. Having a good lender is so important, he/she will assist you with selecting the best loan program for you. You will want to feel financially comfortable and have a general idea what your monthly expenses would be based on an approximate sale price, you will also want to be aware of expenses such as taxes, lender fees, appraisal costs, down payment, closing costs, insurance, HOA fees (if applicable), expected utilities, etc.
2.) Selecting a good real estate agent with knowledge of the local market and proven negotiation experience is invaluable.
3.) If you start your home search prepared with an open mind, you’re already one step ahead, especially during “HOT” market conditions, when properties are selling very quickly. Keep in mind, there are a lot of things about a house that can be easily changed such as paint, appliances, counter tops and flooring.
4.) Be prepared to act fast when you find the home you really like. Make your first offer your best offer, assuming you are potentially up against other offers, or you might miss out. Some lenders issue a quick loan estimate on a subject property for their clients, which is very helpful! Being prepared is key and time is of the essence. Even while an offer is being negotiated, another offer could come in and cut in. A seller can accept any offer he/she chooses. The highest price offer may not necessarily be the best offer for the seller and the seller’s current position. Once buyer and seller are in full agreement in writing, an offer is considered “accepted”.
5.) What price to offer…
Recent sales activity in the neighborhood and area market should give you and your agent the needed information. If a home is priced at or below market value, you are likely not going to be able to get it for less, especially not during the current market conditions. If the home is priced above market value and has been on the market for a while, a lower offer may get you the home. Ask your agent for a Comparative Market Analysis (CMA). Keep in mind, every sellers’ motivation and circumstance is different. Some sellers are very motivated, some sellers are more conservative and don’t mind waiting and keeping their home on the market for longer time periods, as their asking price may be more important to them than a quick sale. Be careful not to insult a seller with a ‘low-ball’ offer, this may offend him/her, you may not even get a response at all. While agents are required to present all offers promptly, sellers do not have to respond to an offer. This is where a good agent is invaluable in guiding you how to best proceed with a good strategy.
Keep in mind: If you are planning on obtaining a mortgage, the sale price of a home will need to meet the appraisal value, otherwise an offer may fall subject to renegotiation of the sale price. If the parties can’t come together on a new price, financing may not be possible and the transaction may fall apart. While offering a higher amount than asking price maybe tempting to get your offer accepted, don’t assume that a seller will have to automatically adjust the sale price, should the appraised value come in lower than the accepted offer price.
6.) Ask questions, the more you know about what is important to a seller, the more you and your agent can do to make your offer as strong as possible. Keep in mind, sellers’ agents are only allowed to share personal details with permission from the sellers. One can ask, but that does not mean one will get the information, but it’s definitely worth a try. Does the seller already have a new place and want a quick closing? Does the seller not yet have a new place to move to and therefore would prefer a longer time period to closing, possession and/or even a rent-back agreement? The more you know, the better strategy you and your agent can put together to make things work best for both parties and to make your offer as appealing possible. Remember, your offered terms could be more important than price. And there are many ways to make an offer appealing and attractive to set it apart.
A note on home inspections: While a buyer can ask for a credit, repair, or correction if the inspection reveals any major unknown problems, a seller does not have to agree to make significant repairs, agree to a issue a credit at closing, or reduce the sale price. Remember, items noted on an inspection report should not translate into a “to-do list” for a seller, it is an evaluation of the current condition of a home and the big question to ask yourself is whether or not you are willing to accept the home in its present condition.
Questions? Contact us, we’ll be glad to help!
Randy and Yvonne Hoyt
2300 W. Michigan Avenue, Jackson, MI 49202