We have some advice for you! With the market still recovering from 2020 and 2021, the inventory is still a bit low. Therefore, you may have a bit more competition when putting in an offer. So, we’ve put together some factors that create a strong offer! Read on to learn how you can stand out from the competition!
Here are a few factors that go into a Strong Offer
01. Shorten the due diligence period – You can terminate the contract for any reason during due diligence, so keeping it short is appealing to the seller. The shorter the period, the less time the buyer has to back out and keep their earnest money
02. Appraisal gap – An appraisal gap stipulation says that the buyer agrees to pay the difference between the appraised value and the contract price. If the home appraised at $290,000 and the contract price is $300,000, this says the buyer will bring that additional $10,000 to closing.
03. Offer option money to seller – Option money or option payment is similar to earnest money. It is paid usually within 3 days of going binding on a contract, and can be credited to you at closing. The only differences are that it is paid directly to the seller, and is non refundable once the contract is binding.
Being responsible for your own closing costs means less money out of pocket for the seller.
04. Pay your own closing costs – Being responsible for your own closing costs means less money out of pocket for the seller. This means at closing you will be responsible for your down payment plus your closing costs (usually about 3% of the purchase price). So be prepared for this and budget accordingly.
05. Offer over list price – These days the list price is just the opening bid. Make sure to look at homes below your budget to give plenty of room to be competitive and still remain comfortable with your monthly mortgage.
06. Get pre-approved – These days, sellers will not even look at your offer without a pre approval letter. This acts as your proof of funds and reassures the seller you are pre approved for the mortgage you are seeking.
You may not be able to provide every one of these suggestions, but even making a few advancements can help your case! If you’re interested in starting the home buying process, click here to connect with a Sage & Cedar agent and set up a new buyer meeting. Or here to start searching online!