Strategic Tips for Crafting Winning Offers

Regardless of any real estate market conditions there can be multiple offers on a property for sale. In today’s market despite the current economic situation the buyer demand is surpassing the void of supply for many types of homes. This begs the question of how can you make your offer more competitive? Here are some great strategic angles to consider.

Appraisal gap coverage

There may be a situation in a competitive bidding scenario where you offer more than the asking price, but that can be an issue when it comes time for the home to be appraised. What if your offer is more than the home appraisal value? In that case you can offer appraisal gap coverage as a solution. Essentially you can offer to pay any overage of the appraisal value in cash.

Earnest deposit

Your earnest money deposit amount indicates your level of commitment to buying the home. While there may be some ways out of the deal should there be issues with the home inspection or the like, but generally the more money you put down the higher the risk you are taking. In a seller’s mind this shows that the purchase may be more solid with a better chance of it closing.

Home inspection limits

You can do this in a few ways like instead of a 10 day period for inspection, shorten this up to having it done in 3-5 days. Also, once you have your inspection you may want to be more open to simply accepting any of the items that are found and deal with them on your end unless they are significant enough that they terminate your interest in purchasing the home. 

Pay your own closing costs

Buying a home certainly does require a lot of money up front for your down payment but also for your closing costs. For buyers with fewer dollars on hand or especially first time buyers it can be common practice to request that the seller cover a certain amount of the closing costs. It would be wise to avoid asking for this if entering a competitive bid situation if you can as a seller will most likely go with the deal where they don’t have to pay.

Escalation clause

This can be a very strong and strategic option for a winning dollar offer. Essentially you can craft an offer stating something like you will pay $X dollars more than any other offer up to a certain purchase price. This can give you an advantage if any of the competing offers are within your comfortable amount. 

Cater to the seller’s timing

This can be done numerous ways too. First, if you can be flexible then inform the seller that you can close in the fastest possible time or that you can work with them on a more preferable closing time. Sometimes sellers need more time before moving to their next home like if they need to wait until it is built or the like. Finally, should they need to close but stay in the home for a brief period then you could provide occupancy to them. In situations like these you can even collect rent or a fee for them to stay in the home as short term tenants.