Any good realtor will know the ins and outs of writing a compelling offer and help you through the process but I wanted to share some advice on what I believe a strong offer will include and explain why these are the things sellers, and their agent, are looking for in the process. Whether you’re a first time buyer or veteran, I urge you to consider the following elements.
First, your offer price. This might feel like an obvious part of the offer but on the seller’s side this one piece of the puzzle is often the biggest. The proceeds they receive from the sale are the only benefit they’re receiving and it could be what they’re relying on to make their next purchase or what they’re using to retire. Chances are they’ll have a firm bottom line of what they’re willing to accept. As a buyer, a higher price will be rolled into your mortgage and you’ll pay for it over the lifetime of the loan. Obviously, as the buyer you need to feel comfortable (and capable) of the amount you’re offering but if you’re really in love with a home, extending a larger offer might be what pushes you over the edge with the sellers.
Next is your earnest money deposit. This money basically acts as a front to your downpayment and it tells the sellers that you’re serious about the home. This money is taken at the beginning of the transaction and held in escrow until you go to closing. If your terms are met and follow through with the sale the money is then applied to your downpayment; however if you break the contract the seller can keep your deposit in exchange for the lost deal. More often then not, earnest money ranges between 1% and 3% of the sale price. Though, again, if you’re truly in love with a home, extending a higher deposit will definitely show the seller you’re serious.
Furthermore, contingencies, can be a big part of the offer - especially as a buyer. Contingencies account for whatever needs to happen in order for buyers to feel comfortable with the offer moving forward. These often are in place for things like inspections, or sometimes can be put in place if you’re trying to sell your current home and buy a new one at the same time. For example, as a buyer you can set a contingency that your purchase will only go through once the sale of your own home is under contract. (This type is less common in the Seattle region as of late because the market has been so heavily in the seller’s favor. Though, with inventory up and prices not rising as quickly as they once were the opportunities for such contingencies are becoming a little more applicable.)
The last thing I’ll mention as a option for a strong offer is your closing date. If you aren’t firmly committed to a particular date and can be flexible to match the seller’s desired timeline, this could definitely work in the buyer’s favor. This can be a great bargaining tool.
Real estate transactions can be a delicate dance between buyers and sellers. The more educated you can be about the process and the more flexible your options and offers, the more likely you’ll come out with a winning hand - just make sure you’re protecting that hand at the same time. My biggest piece of advice is to work with a seasoned professional because it’s their entire job to help you through the process… and it’s what they LOVE to do!
Feel free to contact me if you’d like to discuss your options or the homebuying process, in general.