Get Pre-Approved by a Reputable Local Lender
This cannot be stressed enough. Unless you’re paying with cash it is a point endeavor to go out house hunting and placing offers with being pre-qualified or pre-approved from a trusted lender. I have great relationships with some fantastic local lenders that can help you through this process.
Work With a Professional Buyer’s Agent
It is critical to use an agent in today’s market. First, your agent needs to be experienced, full-time, and know the market like the back of their hand. They can help to guide you through the process, and leverage their network within the brokerage community to help move your offer along. From a sellers perspective it helps if they buyer’s agent has a good reputation, and track record. Also the seller has a professional working on their behalf, you should too.
Increase Option Fee and Earnest Money
To put it simple, offer up some option money. In previous times a few hundred dollars would suffice, but in today’s market the sellers what to see you have “Skin in the game.” – I’ve seen option money as high as $5,000 for a $450,000 home, with earnest money of $35,000.
Waive your Loan Approval Contingency
This points back to item #1, if you are fully approved by a reputable lender you should have some room to waive this contingency. This will allow for the seller to feel more comfortable accepting your offer, especially if there are other offers that are cash or waiving other financial contingencies.
Waive your Appraisal Contingency
This is a very difficult and sometime heated topic in today’s market. First, if you’re not aware what an appraisal contingency is you should contact your lender and discuss it in depth with them. Because the market is appreciating at such a rapid pace, appraisals don’t always meet the contract price. This is where cash offers have more leverage, as they are not beholden to an appraisal. Now, if you have the extra cash to cover the cost beyond your down payment and closing costs, an appraisal waiver can help you overcome this objection from the seller.
Offer the Seller a Lease Back
With the market where it is, it can be challenging for sellers to find their next home if they haven’t already. Offering a lease back to them can help to elevate any anxiety they have about identifying a new home. This also shows good faith on the buyers end. A professional and experienced agent will identify if the seller needs one and their ideal moving time.
Waive your Inspection Contingency
Don’t worry, I’m not saying to waive the inspection entirely. I would never recommend that. Instead, depending on the circumstances you can let the seller know that you are not going to ask them to make any repairs, or renegotiate after the inspection. As long as this is done within the option period you’ll still be able to opt-out if you’re not satisfied with the inspection.
Increase your Down Payment
This is pretty simple, increasing your downpayment lets the seller see that the buyer has strong finances and likely more capable of closing.
Consider an Escalation Addendum
Some buyers are willing to go above and beyond any other buyer to win their dream home. In this situation, you can submit an Escalation Addendum to exceed other offers up to your comfort level.