Don’t Make Good Offers, Make Them Great!

Make Good Offers Great Offers – It can be really upsetting when after all your hunting, you finally find the perfect dream home and you lose it because of one or more simple mistakes.

It’s been a life long lesson that is taught in every generation but most people don’t know it simply because these days on average someone will buy a home once a decade.

Just because you write an offer on a home doesn’t mean that you’ll get your offer accepted or even a receive a counter-offer. Regardless how the inventory,many of the housing markets require different strategies to give you the best chance to get the home you really want.[contentblock id=1 img=gcb.png]

1. Make your best offer initially; you may not get a chance to accept a counter.
   This can eliminate or reduce the chances of finding yourself in a bidding war.
2. Submit a written pre-approval letter from the lender.
   There is a difference between a pre-approval and a pre-qualification. Make the extra effort to get fully approved before submitting offers.
3. Increase earnest money above what is considered normal.
   Most people try to put in the least amount possible but when you double or triple your deposit, it makes your offer stand out and lets the seller know you’re serious about buying.  And don’t worry because in most cases, there are many protections in place to avoid losing any deposit.
4. Make a larger down payment.
   Often times sellers are coached by their real estate agents that when someone puts a lower downpayment that they are a higher risk for closing a loan.  If possible put the larger down and if not, make sure you have a rock solid pre-approval letter.  One of the lenders we work with actually provide a pre-approval insurance to the seller (no cost to the buyer) where if they cannot close the loan ON TIME they (the lender) will pay $10,000 to the seller and you still get the home.  That’s rock solid.
5. Eliminate unnecessary contingencies.
   By default in the California Residential Purchase Agreement there are numerous contingencies to protect you and your deposit. If you want to edge out the competition, eliminate one or more contingencies and the seler’s agent’s eyes will pop open and you get the thumbs up.
6. Don’t ask for personal property not included in the listing agreement.
   If you really need a dining room table, go buy one after close. People ask for items like this and don’t realize they essentially are financing a $1200 piece of furniture into a 30 year loan. Not a wise use of money. Also, the seller may knock your offer down a few notches because that table was hand made by her great grandfather and has been passed down over generations.  Only time this is an exception is if the seller has clearly indicated certain things are for sale and you feel it would help your position if they felt your were saving them a lot of work by taking the goods off their hands.
7. Pay your own customary closing costs.
   It’s common for first time buyers to ask sellers to pay for their closing costs. That’s like saying, “I’ll buy your house if you pay me”.  That’s a tough pill to swallow. In super strong buyers markets, no problem but otherwise avoid asking for closing costs.
8. Shorten the inspection period.
   In California, the purchase agreement outlines numerous inspection periods. Everything from physical inspections to document review. If you can shorten those periods, it takes worry away from the seller that you’re going to back out after being in escrow a couple of weeks.
9. Buy the home “as is” subject to inspections which still allows you to get your earnest money back if the inspections are unacceptable but doesn’t require the seller to make repairs.
   In California, all homes are purchased AS-IS subject to inspection. We say there’s always two negotiations. First when the initial offer is made and then again after the inspections are done.  Re-iterating the AS-IS statement doesn’t change anything but makes you look like a more appealing buyer.
10. Write the seller a hand-written, personal letter (I call them Love Letters) telling them why you want their home; include a picture of your family.
    Be thoughtful when you write one of these letters. Yes, let them know what your plans for you or your family living in their home is but don’t tell them how you’re going to rip out that old oak tree in the front yard. That tree may represent the tree their family planted when they moved in and is the symbol of all the memories they have had. Just tell them how you’re going to enjoy the home, not how you’re going to wipe away their history. Most people have an emotional attachment.
11. Offer to use the seller’s or listing agent’s preferred service provider.
    YES! YES! YES! It may sound silly but on a personal note this is something that drives me nuts when I am the listing agent. While all services are negotiable, I will have already set up the title insurance reports, escrow, termite and other services. When the buyers agent wants to use their ‘friend’ at one of these services, all it’s going to do is cause the seller to have to issue a counter offer.  It’s happened more than once that we got a good offer but they want to use their friend for something and during the counter offer process a better offer comes in. Wah Wah Wahhhhh!!!  Nothing was finalized so that buyer loses and the new buyer wins.
12. If you can pay cash, do so and arrange financing after closing.
    This is a great idea if you have the ability.  If you’re going to do this though, make sure you have been pre-approved for any follow up financing.
13. Be prepared to show proof of available funds.
    Yep, it’s amazing how many people say they are putting down a certain amount because they’re expecting a bonus some time before closing. Ever not gotten the bonus you were expecting?  It happens.  Only play with the money you have.
14. Schedule the closing as soon as possible but let the seller know you can be flexible.
    It’s always a good idea to have the buyers agent check with the seller and see what they are hoping for a closing time period. You can’t imagine how stressful it is to have to move 2 weeks before you are able to move into your replacement home.  Likewise, forcing them to wait 60 days when they were ready to move in 30 causes the same stress.  Adjust accordingly. You’ll be their hero.
15. Once you decide on a home, take immediate action.
    I tell all my buyers to use their instincts. When you walk into a home and it’s “the one”, don’t hesitate. Put the offer in that day. Why? I’ve seen it 8 out of 10 times. When a buyer finds the perfect home, they wait to see more homes next weekend and then realize that yeah, that was the best one, guess what?  It’s already sold.  It’s difficult to find another perfect home after that.
16. Have everything ready to go in advance.
    Loan Pre-approval, Love Letter, Deposit Money etc. Sometimes waiting just one day to get that extra thing you needed could cost you the home. Create a file folder with extra copies of everything.  Ask your agent to keep a copy too.
17. Don’t let your agent submit a sloppy hand written incomplete offer.
    The way an offer is presented tells the listing agent a lot about how the transaction is going to go. Neat, clean, no blanks, all numbers correct, professional looking says this buyers agent knows what they’re doing and this should go smoothly.  Sloppy and incomplete says this agent is going to need hand holding and probably aren’t communicating with their buyer properly so put it on the bottom of the pile.
18. Ask your real estate professional if they have any other suggestions.
    Your agent should tell you all of these things already. However, for a certain neighborhood, school district, tax assessment area, they may have additional insight that can prove to be invaluable.

Take it seriously. Think of making an offer like applying for a job. You want to make your best impression and show why you are the best choice. There may be multiple offers you don’t know about. Go into it assuming there are and play to win.

These tips will help make your buying experience much better.