Written by Kimberly Smith
With a low housing inventory, sellers are in the prime position of often receiving multiple offers on their home.
While this can be an ideal situation for the seller, it can make things more difficult for a buyer. There are options though to make a buyer’s offer more appealing to a seller.
If a seller was looking at two offers for exactly the same price on their home, there would still be things that could make one standout more than the other. If there happens to be more than two offers, things can really get sticky for a buyer. For that reason, it is good to craft the most attractive offer possible because even if you don’t have competition now, another offer could come in during negotiations and derail all your efforts to that point.
Anything that can give the seller the peace of mind that one contract will close on time and as agreed will make them more comfortable in accepting one offer over another. Buyers can consider putting up larger than customary amounts of earnest money and limiting the contingencies to only the most essential items.
The closing costs could be more expensive to the seller based on the type of mortgage a buyer is obtaining. One buyer may be asking the seller to pay part or all of their closing costs, and the other buyer is paying their own costs.
The borrower who has a signed preapproval letter will appear to have a greater certainty to closing than a buyer who only says they have talked to a loan officer. Some lenders’ letters are considered “gold” and others may not be worth the paper they’re written on. The seller will depend on their listing agent to advise them.
In most cases, the seller will be taking all or part of the cash they receive from the sale of their home and buying another one. If they have to put a contingency clause in the contract based on their current home selling, it weakens their position. Conversely, it will strengthen a buyer’s position if they don’t have to make their offer contingent upon selling their current home.
Even shortening the inspection periods and offering to close early or offering a possible lease back on the home to the seller for a short time can be valuable negotiating factors.
Finally, don’t overlook the value of a personal hand-written letter that tells the seller why you want their home. An emotional connection has been known to make a difference for one set of buyers getting the home.
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