As a buyer in a competitive market like we’re experiencing now, both locally and nationally, you may have experienced the frustration of writing an offer on a home or even two or three homes that were not accepted. Low inventory markets are strong sellers’ markets and due to the high demand for homes it drives pries up. What that means to buyers is that you need to have a discussion with your agent if you haven’t already about how to structure your offer so that it stands the best chance of getting accepted by the seller. It can be painful to find that perfect home and write an offer only to find out there were 3 or 4 other offers and you didn’t win. When this happens a few times during your quest for a home, it can get discouraging. Don’t worry! I’m going to share with you some tips from three real estate agents that they share with their buyers when writing a purchase agreement.
Due Diligence Money
In a competitive real estate market like the one we have here in Raleigh, North Carolina you’re likely going to be competing against a number of qualified buyers who all want the same house. So you’re probably wondering ‘how do I get my offer accepted on the house I want?’ There are a few strategies we use that help us put together a compelling offer for our clients to have the best chance at winning the home:
One strategy is to use a high amount of due diligence money. Due diligence money is the money paid by the buyer to the seller to take the market off the property to allow them to inspect the house. With a high due diligence fee the sellers will feel comfortable that a buyer is the real deal and will be most likely to reach the closing table. One home in Cary, a city just outside of Raleigh, reported a $40,000 due diligence amount. This is the most I’ve ever heard of and you can be sure that offer will stand out. Typically, a 1% due diligence fee is enough to stand out and get your offer accepted!
Ryan Fitzgerald
Realtor/Owner, Raleigh Realty
Contingency Timeframes
San Diego is one of the hottest real estate markets in the world. It’s common place for a master planned community of 5,000 residences to have as few as 5 homes for sale at a given time. With inventory levels at historic lows, buyers are competing for properties more than ever before. For example, take a twin home in a good school district of San Diego. In less than 7 days of listing, it amassed 15 offers and ended up selling for $40,000 over asking price. That’s just one of many similar examples from 2017 alone.
So, how can a buyer stand out from the rest of the crowd? It all starts and ends with the purchase contract. Take California escrow timelines as an example. Escrows are typically 30 days long, and contingencies such as loan, appraisal, and inspections, are about 21 days by default. If you want to stand out immediately, start by shortening those timeframes by several days. Lenders can oftentimes close in 21 days and a well-reviewed inspector can conduct an inspection in as little as 2 days from the date escrow is opened. Imagine telling a prospective seller that you can have all contingencies cleared in less than 14 days. That would not only catch their attention, it would build credibility, and show how committed and well prepared you are to close on their home.
Christian Gallego
Realtor, Coastal Premier Properties
San Diego, CA
Closing Date
One variable to consider if you want your offer to standout over the other buyers’ offer is picking an earlier closing date than usual. Some buyers want to close 45-60 days out for no particular reason. If my buyers can move in within 30-35 days, I suggest we put that in the offer. From a seller’s standpoint, they are ready to sell and move on. So they’d rather close sooner than later. A quality and reputable lender can make closing happen earlier and smoother. Having a great lender that you can rely on is very important. So my suggestion is to pick the earliest closing date that makes sense for you and your family. It could be the difference in you getting your offer accepted on your dream home.
Matt Castleberry
Realtor, NextHome Specialists
Columbia, SC
