When you are in a hot real estate market where you continue to lose out to other property buyers, you might want to consider making a controversial offer that those sellers cannot refuse. However, you have to play fair. The great news is you can make an offer on a house which seals the deal without having to break anybody’s legs.
Do Not Make the Offer Unless you are Pre-Approved
Being pre-approved shows property sellers that you are financially credible. You can actually ask your lender to pre-underwrite your file in which you send all related documents to the lender. This places you in the same league as cash buyers. It enables you to provide a shorter time to close since all of your financial hurdles have already been cleared.
Trying to negotiate on a home may not be able to help you get to the closing tab when you are in a hot market. You would want to go in at listing price or higher in the comparable properties that support a higher offer price.
Decrease Your Contingencies
While you must go in with a strong offer remember that money is not everything. It may not be able to purchase a seller’s happiness. If you’re so focused on money now it can be time to wave some contingencies. When you get pre-approved for a mortgage and have some cash, it will be possible for you to waive the financing contingency which is an agreement that gets you out of a deal when you cannot obtain financing. Coldwell Banker Olympic, a provider of real estate services in E. Imperial Hwy. La Mirada California believe that this is a technique for people with extra cash or are working with banks that don’t require repairs. However, remember that when the appraisal is low, come up with the difference in cash.
Add an Escalation Clause
When you believe that a property seller will get more than a single offer, make sure the seller picks yours by ensuring your offer increases automatically by a predetermined amount. Remember that when the escalation clause is triggered, home sellers will have to reveal the competing offer in order to keep things honest. For instance, you make a $400,000 offer for a house with $5,000 escalation capping at $430,000. When somebody else makes a $410,000 offer, yours automatically escalates to $415,000 which beats the other offer. However, when an offer comes in higher like $450,000 and you have $430,000 cap then you would be out.
Have you recently changed tactics in order to get your offer accepted? Please let us know by sharing your experiences with us in the comments below.