With a low inventory of houses on the market and demand high, many buyers find they are competing with others to secure the house they want. When dealing with multiple offers, buyers should to do what they can to make their offers standout.
6 Things a Buyer Should Consider
- Visit the property: Too many buyers are tossing offers out there, seeing which one sticks and then going to see the house. Experienced agents know when an offer is from someone who has not seen the house and will only recommend these offers as a last resort.
- Have a lender preapproval letter: Most lenders will issue a pre-qualification letter without much research. These are worth next to nothing when compared to cash and preapproved offers. Meet with your lender, provide them with the information they need to provide a preapproval. It does not guarantee a loan but it shows the seller a lender has verified income and credit to determine mortgage payments are affordable.
- Offer a fair price: With multiple offers we are seeing fewer opportunities for buyers to improve their offer. Dont make a lowball offer thinking you can increase it later. Buyers should use current sales prices of similar homes and submit their best offer. Listen to your agent; they have experience which can help.
- Be careful with contingencies: Naturally buyers do not want any contingencies but it is important to have the protection for buyers. Unless you are very confident in having a loan approved do not remove the loan contingency. A solid preapproval letter and healthy earnest money deposit will give the seller confidence in the buyers ability to perform. In addition, be very careful about removing the appraisal contingency. If this is considered make sure you fully understand what it means.
- Increase earnest money: This is an easy way to show sellers how serious a buyer is. If a typical deposit is 1 percent, consider doubling the amount.
- Add a personal letter: Although there are times when a letter from the buyer to the seller does not seem to work, there are times when it does and it is an opportunity for the seller to demonstrate they have been in the home and to articulate who they are and why buying this home is important.
The above items can be important in making a buyers offer standout but, if I had to pick one as the most important, it would be to get a preapproval from a reputable lender. Good agents will call your lender before recommending the offer to the seller. Just recently when I called Chase about a pre-qualification, the loan officer didnt seem to remember the buyer and spent more time providing a disclaimer about the letter than getting a loan. It is critical the seller have confidence in the buyers ability to get a loan and this is provided by the preapproval.
If you or someone you know is considering buying a home and you have questions, please let me know, we are here to help and I enjoy hearing from readers. I can be reached by email at JulieJ@Jalone.com or by phone (916-899-6571) at the MagnumOne Realty office in Roseville.