If you’re buying a house in a competitive market, you need to figure out how to make your offer stand out. Here are four of the best ways to do just that.
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1. Offer Above Asking
2. Add an Escalation Clause
3. Don't Include Contingencies
4. Write a Letter
Offer Above Asking
Perhaps the most straightforward option for homebuyers trying to stand out in a seller’s market is offering above asking price.
In a competitive housing market, sellers are likely receiving multiple offers, and will typically accept the highest one they receive. Offering above the asking price communicates to sellers that you’re ready to negotiate and that you understand that the home they’re selling is desirable and valuable.
Ultimately, the most important thing is that sellers know you’re a serious buyer, that your interest in their listing is strong, and that you have the money needed for the purchase, meaning that the deal won’t fall through.
Add an Escalation Clause
When an offer includes an escalation clause, it means that the potential buyer making the offer is willing to continue to outbid competing offers up to a certain price.
With an escalation clause included in your offer, even if a higher offer comes in, you won’t lose the opportunity to buy the house. Additionally, an escalation clause shows sellers that you’re serious about wanting to buy their house and that you’re willing to compete for it.
Don’t Include Contingencies
A contingency is a condition that must be met in order for a deal to close. If an accepted offer includes contingencies which the sellers fail to meet, the offer will fall through with no financial repercussions for the buyer. For example, a buyer might include a contingency like “the seller will complete and pay for electrical inspections within 14 days” or “the seller will repair all broken windows prior to closing” in their offer.
However, in a seller’s market, sellers typically won’t consider offers with contingencies worthwhile. Remember that you’ll likely be competing against other potential buyers in a multiple bid situation. The sellers are the ones with choices and leverage!
Anything that makes you and your offer easier to deal with, or gives the sellers confidence that a deal with you won’t fall through, is going to be a point in your favor.
Write a Letter
A more sentimental approach to standing out in a seller’s market is to write the sellers a letter. This will differentiate your offer from its competitors that are solely comprised of numbers and legal jargon.
People are emotionally attached to their homes, and explaining who you are, why you want to buy their house, and what having this home would mean to you adds a human element to the home buying process that appeals to that emotional attachment.
If you’re trying to make your offer stand out in a seller’s market but you’re not in a position to go much above asking price, a heartfelt letter to the sellers can provide your offer with the push it needs to edge out the competition.
Even one of these methods could be what you need to guarantee your offer will stand out in a seller’s market, but the more you employ, the more competitive your offer will be. With these tips, you’re equipped to make a winning offer in a competitive housing market.
If you’re ready to buy a home and want to stand out from the crowd, contact the Poli Mortgage team.
