I frequently hear stories from frustrated buyers who can not get an offer accepted. “We’ve written offers on 4 homes and we can’t seem to compete with other buyers”. I’ll tell you a secret… Your agent is either giving you bad advice or your agent does not know how to get a seller’s attention with a good offer. I get almost all my offers initially accepted by sellers. Here are the top 5 stratagies I use.
1) Get your financing organized BEFORE you write an offer. If you can’t provide a pre-approval letter with your offer, then you’re not ready to write an offer. Do the heavy lifting up front and see a lender, get a letter of pre-approval, and attach it to your offer. Your offer now has one less thing a seller needs to worry about. After your initial consult with a lender, most will make themselves available 7 days a week so you can contact them and obtain a custom letter that includes the property address and exact amount your borrowing. This tells the seller that you are prepared, have been thinking about this for awhile, and that your offer is not just a dream. I can refer you to several quality lenders if you don’t have one already picked out.
2) The buyer’s agent should contact the seller’s agent and compile a list of what the seller would like in addition to the list price. Some agents don’t bother to call the listing agent other than to confirm that the property is still available as advertised on the MLS. An example of things a listing agent can tell you are: Does the seller want to agree to arbitration/mediation, would the seller like liquidated damages, long or short escrow, does the seller need to rent back for a short period, does the seller have a specific title company or escrow officer they’d prefer to use? By asking these questions up front, you can limit the issues in a potential counter offer. As an experienced listing agent, I know the types of things sellers find attractive in an offer.
3) Write a personal letter to the seller and attach it to your offer. I have my buyers write a letter to the sellers. I tell my buyers exactly what to write. There are 3 topics, each topic should be its own paragraph. I’ll write the letter for buyers who are self-conscious about their writing abilities. The nice thing about this letter is that if done correctly, the seller wants to sell you their home before they even get into the details of the offer.
4) Don’t low ball the price: In a seller’s market, your initial offer is not the time to look for a deal on the property. I know that most buyers think this is the time to lock-in a “good deal”, but there’s no deal to be made if your offer is not accepted. I tell my clients that there will be plenty of opportunities to reduce the price AFTER your offer has been accepted. Things like inspection reports, appraisals, and other information discovered about a property open the door for negotiating the final price you pay.
5) Limit your contingencies: Contingencies are ways a buyer can get out of the purchase contract. The contract has contingencies written into it that a buyer may choose to incorporate in their offer. Contingencies are things like loans, appraisals, inspections, reports, seller’s disclosures etc. Limiting the number of contingencies shows the seller that you want the home, and have limited the number of ways you can get out of the contract to just a few key concerns. The contract I prefer to use has a 17-day buyer’s inspection period written into it. I like to increase that to 21 days and include a loan contingency then leave out the other contingencies. Most other contingencies in an offer can be covered by the one 21 day inspection period contingency. If you need to extend that later, you can always ask. Once in contract, most sellers become flexible with issues like appraisal and loan contingencies. Some buyers are afraid to give up their contingency options, but remember, contingencies don’t mean anything if your offer is not accepted.
(Bonus) Be the last to submit an offer: In a multiple offer situation, the buyer’s agent’s goal should be to be the last offer submitted. Just prior to actually submitting the offer, I query the seller’s agent about the best price offered so far and feel out the competing offers. Offers are not confidential unless the seller wants them to be. It’s in the sellers best interest to tell buyer’s agents about the best offer in their possession.
I love living in Rincon Valley! I’ve lived here since 1995 and can’t imagine living in a better north bay community. Call me today if you’re interested in buying a home in Rincon Valley, or if you’d like to list your Rincon Valley home for sale.
- Jim Cheney, Broker
- Saint Francis Property
- (707) 494-1055
- Rincon Valley – Santa Rosa
- Cert Tourism Ambassador