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How to Submit A Competitive Offer!

Buyers – have you been searching for the perfect place for months and even submitted offers, but have yet to get to the closing table? Are you tired of submitting offers on homes you love and losing out to the “highest and best” offer? We here at Dalton Wade understand the frustration, it is a competitive seller’s market at this time in our area.  This means that good property inventory is low – and we have more buyers than quality inventory, resulting in multiple offers in some cases.  Just read on for tips from those of us that help buyers like yourself put in the “highest and best” offer every day.


Most buyers think that the obvious way to win an offer is to offer the highest price.  Before you do though, have your agent do a comparative market analysis for you (CMA).  This will let you know the market value range of the home so you can offer accordingly.  Also make sure with your lender that you qualify to offer as high as you are thinking.  If it is competitive you can offer on the higher end, and while you an offer whatever you want – just be mindful that the property needs to appraise for purchase price in most situations so usually going too high over is not recommended.

While this is definitely helpful, there are also other ways to get sellers their higher net proceeds than just price or in lieu of price.  You never know what is important to a seller, some motivations are different – some sellers might be looking for a larger deposit, a faster closing, a shorter inspection period, a strong pre-approval or cash, etc – not always the highest price.  Here are a few other ideas for you, especially if you can not offer a higher price due to financing limitations.

Other Contract Terms

Deposits.  As a buyer, your earnest money deposit (the funds you post to be held by a third party for the duration of the contract), shows your “good faith”.  It shows you have skin in the game and will not just walk away when a seller pulls their home from the market to go under contract with you.  Posting a larger deposit shows you are more serious, or posting 2 (1 right after the inspection period is completed) can show how serious you are to a seller.

Closing Cost Assistance.  If you do not need it in order to close, you can always consider not asking for closing cost assistance from a seller.  It has become a widely accepted offer feature these days, but in multiple offer situations it can hinder your offer since it lessens the net proceeds to the seller if they have to pay your closing costs.  If you do need help with funds to pay for your closing costs then of course we encourage you to ask for it (some competing offers will still contain this), but in a competitive situation you may need to increase price or ask for less in closing costs to offset this.

Closing Date.  Sometimes sellers are looking to close ASAP, especially if the property is a flip or vacant.  Writing a shorter closing date can be highly desirable – this means less days the seller has to wait to get their closing proceeds.  Most banks can close in 30 days or less in Florida so 30 days has become standard, if you can close even sooner then great (ask your lender first what is possible for them) but 30 days is the longest recommended time frame for a seller wanting to close fast.

Inspection Period.  With the commonly accepted As-Is Contract in Florida, buyers get an inspection period up front once they go under contract to inspect the home and decide if they want to proceed with the purchase or cancel for their deposit refund.  A shorter inspection period is also desirable to a seller, it indicates a shorter amount of time that their property would have to be off the market before going back on for other potential buyers if the deal were to fall through.  10 days is commonplace but if you can do less (like 7 or 5) that can give you a great edge! Just make sure to check with your home inspector’s availability first.

Financing and Pre-approval

Loan types.  Loan types and their contingencies can also help strengthen or weaken an offer.  Cash is usually preferred because there are no strings attached when it comes to appraisals or verifying your income, etc.  Conventional loans are also highly sought after is you can qualify for one – bonus, if the property will be your primary residence most of the time you can do just 5% down! FHA and VA loans are still great but their appraisals sometimes require repairs by the appraiser in order for the purchase to proceed, so sellers can be weary.  If you only qualify for VA or FHA do not worry – there are still plenty of other competing buyers with this loan under their belt.  VA and FHA also have appraisal contingencies that the home must appraise, but for conventional loans you can forgo an appraisal contingency or say if the property does not appraise you will pay the difference up to a certain amount, etc.

Strong Pre-approval.  Probably the most important card you have to play is a strong pre-approval letter.  You want to have a pre-approval from a reputable bank, big box banks are not always best.  Usually the smaller or local lenders or mortgage brokerages can get things done quicker and in a more orderly fashion with constant communication.  Regardless, your pre-approval should include the fact that your credit has been verified, your debt to income examined and you have preliminary desktop underwriting approval.  If your agent provides the seller’s agent with the lender’s contact information – the listing agent can call to verify you with the loan officer directly to put her sellers at ease.  If your lender is available nights and weekends to discuss this as well, that is great as a lot of offers happen during those times.

Extra Touches!

Escalation Clause.  One trick that not everyone uses is the “Escalation Clause”. It is helpful when you don’t know what kind of offers you are up against but you still want to have an edge.  In this case, your realtor can write in a clause and say something like “buyer to offer $1000 over seller’s next highest offer resulting in highest seller net proceeds, with proof of offer required”.  That way you will give the seller higher net proceeds every time (unless you are up against other escalation clauses), but you aren’t over extending yourself because you put a cap on how much you would be obligated to pay up to.

Buyer Personal Letter.  And last but certainly not least, this has helped us all win offers before for our buyers at one time or another – the touch of the buyer personal letter.  In this scenario, the buyer hand writes or types up a personal letter addressed to the seller letting them know a little about themselves, how much their love the home and how much it would mean to them.  Some buyers even include photos of themselves, their family and even their pets.  Sellers can have big hearts and a personal letter can never hurt! But of course it does not work in every situation.

Ready to buy with us and submit the offer to get into your next home? We have highly trained agents ready to assist you in putting your best foot forward with the most competitive offer.   Visit us today to view our agent list or contact our office and we will assist you from there.

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One Response to “How to Submit A Competitive Offer!”

  • Excellent ideas to avoid bidding wars and prices out of control. Higher deposit is interesting and shorter closing date seems wise. What would work best in St Petes I wonder? Florida is a bargain really, so finding ways to woo sellers might pay off, when you’ve found a place you really like. I’ll keep these tips in mind!

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