With the inventory of homes in the Novi Real Estate and Metro Detroit Real Estate Market at a low, home buyers are finding themselves involved in more multiple offer situations trying to purchase. Being involved on both sides of the transaction, here are a few tips to help give you a better chance getting your offer accepted. As the old saying goes, you only get once chance to make a first impression.
1.) Make Your First Offer, Your Best Offer – I see too many home buyers that wait to see if the sellers will counter their original offer and so they decide to offer lower initially. Impress the seller with your offer price. If the home is priced right, then offer the list price or close to it.
2.) Increase your Earnest Money Deposit – Impress the seller with your initial deposit you put down. Consider offering 3-5% of the offer price. This deposit along with your offer can be contingent upon contingencies such as home inspection, satisfactory appraisal, review of bylaws and mortgage approval.
3.) Remove Some/All Contingencies – As I previously just stated, there are contingencies typically always built into any purchase agreement. By removing some or all of these contingencies, this may be able to separate your offer from the others being submitted.
4.) Be Pre-Approved – I know this may be a no brainer but surprisingly, many home buyers do not have this before writing an offer. No home seller will take your offer serious without knowing you have done your due diligence on getting a pre-approval for your mortgage. To take it a step further, you may want to ask your loan officer if they can give you a mortgage approval. This may require more documents supplied to the lender from you and may remove additional requirements stated on your pre-approval. Most pre-approvals typically have contingencies or requirements that need to be met first before getting a mortgage. The fewer the requirements required to get a mortgage approval, the better for you.
5.) Do NOT ask for Seller Concessions – Sellers concessions are a credit the seller gives back to the purchaser at closing to help with the buyers closing costs such as pre-paid interest, taxes and mortgage expenses. By asking for concessions, you are reducing the bottom line for the seller and making your offer look less attractive. If possible, try not to ask for sellers concessions.
6.) Have a Larger Down Payment – Bottom line is the larger the down payment you have, the less of a risk it is for the bank to give a mortgage on the home. If possible, put down the largest down payment as possible to lower your mortgage amount needed to purchase. That is why cash offers have and always will be the most attractive offers since there is no risk for getting mortgage approval.
7.) Put a Highest and Best Clause in Your Contract – Even after all of or some of these tips have been added to your purchase agreement it may be a good idea to write in a “Highest and Best” clause. I always make this an option for my home buyers when we know there is multiple offers. This clause states that your offer will go “X” amount of dollars over the highest offer submitted. For example, you will agree to go $2,000 over the highest offer submitted up to “X”. You want to make sure you put a ceiling on how high you are willing to go on your offer.
By implicating any one of these tips into your purchase agreement, next time you are involved in a multiple offer situation in the Novi Real Estate or the Metro Detroit Real Estate Market these tips should help increase your odds in getting your offer accepted. As always, if you have any questions, call me anytime at 248.939.9393