In most housing markets, the demand for real estate is high. If you’re trying to buy a home in a seller’s market you’ll experience unique hurdles. Making an offer that stands out takes planning and decisive action. Here are a few tips that can help you get your offer accepted.
Make a Good Offer to Get Yours Accepted
In a buyer’s market, you have a little more flexibility to negotiate but in a seller’s market, you want your offer to be strong. Offer higher than the asking price and include minimal contingencies. Complicated terms are likely to get you nowhere, so keep it simple and make the offer hard for the seller to pass up.
Beat the Deadline
When homes are flying off the market, the last thing you want is to find yourself up against a deadline. Turn in your offer well before the review date and you’ll stand a better chance. To be sure to get the seller’s attention, make an offer that is early and above the asking price. As offers start to flood in, the seller may become overwhelmed and he or she is likely to remember the first appealing offer.
Avoid Bidding Wars
If you have the funds and you really want the home, include an escalation clause with your offer. The impact of this is two-fold: it shows the seller that you are serious about purchasing the house and it automatically matches offers from other buyers up to a specified price to save you some of the legwork. With an escalation clause, you won’t have to submit another offer if you are outbid.
Put More Money Down to Get Your Offer Accepted
Money is a powerful tool. If you have it available, consider offering a more substantial down payment on the home. More money upfront is appealing because the seller sees you as a financially prepared buyer. A large down payment will go a long way toward getting your offer accepted. Aim for a down payment of more than 20% of the asking price.
Earnest Money Shows Interest
Increasing the earnest money deposit is another sign to the seller that you are ready to make the sale happen. It will depend on your local market, but usually, the percentage of earnest money that a buyer puts down is around 1-3% of the home’s asking price.
If you are confident that your offer is well-rounded and is already likely to stand out, then increase the amount of earnest money you offer. Should the seller accept your offer, that money will go toward paying for the home, however, if the deal falls through, you don’t get that deposit back.