Simple Home Buyer Offer Strategies
These are some simple, straight forward strategies that home buyers can use when making offers in a competitive market. Most of these be should be consider when a buyer is writing an offer that is intended to be appealing to sellers in any market.
- Submit a well written offer –The offer should be complete, error free and without a lot of complex terms and conditions. I strongly recommend working with an experienced real estate broker who understands the importance of a well written offer.
- “Front load” all due diligence deadlines – This basically means that all of the due diligence items, associated with a purchase contract, are completed as quickly as possible. The contract submitted (the offer) should indicate that all due diligence items will be completed at the ‘front end’ of the contract timeline. For contracts written in Colorado those due diligence items include: inspections, surveys, HOA document review, Title review and loan conditions.
- Increase earnest money – Increase the amount of earnest money deposit the buyer is willing to provide above what the seller has requested. This can indicate to the seller that the buyer has sufficient cash to close the transaction and is serious enough to risk a large amount of money should they breach the contract.
- Shorten the transaction timeline – Write the offer so that the time between when the offer is accepted and when the transaction will close is as short as possible. If the buyer is working with a lender, be sure the lender is aware of, and has agreed to, the shortened timeline.
- Buyer offers to pay for all fees and ‘extras’ – There are a variety of fees that are associated with a real estate transaction. Traditionally many of these fees are split equally between the buyer and the seller. In this case, the buyer might offer to pay 100% of those fees. These fees might include, owners extended cover for the title insurance, home owner’s association transfer fees and status letters and title closing fees.
- Strategize about timing for submitting an offer – Very often, in a competitive market, the seller may request that all offers be submitted on or before a specific time. There might be an advantage to waiting until the last minute to submit your offer. This should be discussed with your real estate broker because there could be some risk involved.
- Submit a pre-approval letter from lender with the offer– this should probably be #1 on the list. A buyer, in this market, shouldn’t even be looking at homes without a pre-approval letter from a lender. This means that the lender has all of the necessary documents, in hand, and has completely qualified the buyer pending an accepted offer and an appraisal.
- Home inspection pre-scheduled – I strongly recommend you work with a home inspection company that will allow you to pre-schedule a home inspection prior to an offer being accepted. This allows the inspection process to be expedited and shows the seller that the buyer intends to diligently execute the transaction timeline.
- Other support professionals are identified and available as needed – be sure you know what other professionals you may need to engage to complete the transaction and that their schedules are flexible enough to accommodate the transaction timeline. These might include a surveyor, sewer line inspector, radon inspector, roof inspector, etc.
- Understand advanced offer strategies and their associated risks– there are other advanced strategies that buyers might want to consider. They are much higher risk strategies and should be thoroughly understood and thoughtfully considered. It is also important to work closely with your real estate broker to evaluate the advanced strategies.