In this highly competitive real estate market, many buyers are asking how they can get their offer accepted.
Ryan Haley offers six tips to boost the strength of your offer.
If you have the ability to pay cash and/or borrow money from another investment to use that cash to pay for the property, you are going to put yourself in a much better position.
As-Is Vs Inspection
If you don’t have the ability to pay cash for that dream home, another way you can make your offer stronger is by taking the property in its as-is condition. You can still have that inspection done but only keep it for informational purposes. This is beneficial to the seller as opposed to having a full inspection, in which case, the seller would think that you will want to negotiate some repairs.
However, you may not feel comfortable moving forward taking the property in its as-is condition. It is highly recommended that you still get the inspection done for informational purposes.
Pay State Stamps and Transfer Taxes
The other option you can take is to pay the entire state stamps and transfer taxes. In this case, you will not necessarily have to increase your price, but you are increasing the net effect to the seller, putting more money in the seller’s pocket by paying for the state stamps and transfer taxes. In Worcester County, Maryland, this is 1.66% of the purchase price. In essence, you are increasing your offer by 0.83%. This may just be enough to get the seller’s attention.
The other piece you may want to consider, especially if you have additional cash on hand would be to waive the appraisal. This is something that we see very frequently. Essentially, what you’re saying is that you are going to waive any kind of appraisal contingency. This is specifically for buyers who are financing the property and who want to try to level the playing field with a cash investor.
With this approach, you are taking one less thing for the seller to worry about. As we all know, the appraisal world runs behind the market. The market far outpaces what’s actually going on in the appraisal world because the appraisal is based on past sales that are two to four months behind.
Non-Refundable Good Faith Deposit
The other thing you can do—and this is not for everybody—is to make a portion of or the entire good faith deposit non-refundable. Here, you are essentially giving the peace of mind that if they accept your offer and you still decided to cancel it based on one of your contingencies, they’re going to be either getting a portion or the entire amount of your good faith deposit, in lieu of you actually going to settlement. That might just be enough to kind of reduce the risk that the seller is feeling by accepting your offer versus somebody else’s.
The last option, which is a newer idea but can work very well, is to offer the seller a signing bonus.
What does this mean?
There are a lot of properties that are listed in a Coming Soon status, where they’re trying to build excitement and to get everybody to look at that property. This might run for a few days before the launch date, at which point, they will get as many offers as possible. One technique that might attract the attention of the seller is to offer them an additional amount, for example, $5,000 or $25,000 just for accepting your offer right away.