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Writing a solid purchase offer on a property requires a strategy that considers various factors that could influence the seller’s decision to accept or reject the offer. This article features some suggestions to increase the likelihood of an acceptance.
OFFER PRICE
- Carefully consider the current market and the value of the property in its current condition so you can make a reasonable offer based on recent sales and comparable properties in the area. It’s not a good strategy to make an offer that is too low, hoping to begin a back-and-forth negotiation. Sellers may flatly reject offers that are too low and that would be the end of any discussion on the sale price.
- If there is a chance there could be multiple offers, one approach is to offer slightly more than the list price to potentially rule out other offers. Again, it also matters what the current market is and the availability of homes for sale.
- If you believe the property will appraise for a higher price, another strategy is to offer more than market value but, in return, ask the seller to pay for some of your closing costs. The net profit to the seller would be the same as if you offered a lower price but the higher offer may be more appealing to the seller.
FINANCIAL ABILITY
- Always include a pre-qualification or pre-approval letter from your lender to show the seller that you are financially able to buy the property. It’s always better to obtain a pre-approval letter before making an offer. These are conditional loan approvals in which the mortgage underwriter has already verified your employment, income, bank statements and debts. It shows the seller that you are more likely to be approved for the loan and are farther along in the mortgage process.
- An earnest money deposit is a good faith deposit, a small advance made toward a down payment to show the seller that you’re committed to the purchase. Offering a higher-than-usual earnest money deposit can also demonstrate to the seller that you’re serious about the purchase.
OTHER CONSIDERATIONS
- If you can be flexible with the closing date, an offer can be made more appealing to the seller by learning their preferred closing date, then incorporating that into the offer. Sometimes, allowing a seller to rent the property for a short period of time after the closing will also help if the seller may need extra time to completely move out and into another property. The best way to find out what concessions the seller will find favorable is to have your agent ask the listing agent.
- Contingencies are conditions that must be agreed to by the seller and buyer for the sale to be completed and they often include a mortgage or financing contingency, an inspection, and an appraisal. Some contingencies are necessary, such as loan approvals and home inspections, but it’s always advisable to keep unnecessary contingencies to a minimum in a seller’s market.
- Be cautious about asking for too much personal property in the home not itemized in the MLS listing. The seller may offer some additional household items after your offer is accepted but you shouldn’t assume that either.
- Offer to contribute to the seller’s closing costs. If you should choose to do this, always specify the amount that you’re willing to contribute.
- Include a personal letter with your offer. Tell the seller why you love the property and how you plan to take care of it. This personal touch may help the seller feel more comfortable and increase their chances of accepting your offer.
A solid offer to purchase is about more than the highest price offered for the property. It’s about showing the seller you are serious, financially capable, and committed to purchasing the property. By following these suggestions, you can increase your chances of getting seller acceptance of your initial offer.
When the time comes to make an offer, I will provide information to assist you in your decisions regarding your best offer and show you ways to increase favorable seller responses. Then I will present the offer to your advantage, communicate the seller’s response to you, and, if necessary, suggest further negotiating options. And remember – as your advocate, I am here to help you achieve the purchase of the home that you want!