Home Buyers – Getting Your Offer Accepted
Updated for 2017
Buyers: You’re about to start looking for your new home. It’s exciting, scary and most likely overwhelming. You may not know where to start. Zillow? Trulia? Redfin? Realtor.com? You can read all the articles you can get your hands on but to truly be prepared, you need to speak with a full-time real estate agent who knows the area(s) in which you’re looking. Since inventory is lower than expected and Buyers are out in droves, you have to make yourselves as competitive as humanly possible. This is part of an agent’s job and can save you significant time and energy. Read these points to stay on top of the game and come in as a serious contender:
Choosing Your Agent
I’ve encountered many Buyers who are hesitant to work with an agent at the beginning of their search because they don’t want to feel rushed, persuaded or “tied” to anyone, however, the right agent will be supportive and not pushy. Your agent is your point-person to make you as competitive as possible for the market, introduce you to the right lenders, find the right properties, schedule showings, advise you on all real estate related matters, help you write a killer offer and take you through the escrow process. Your agent should coordinate all aspects of escrow including inspections, the escrow company, title company, lender, listing agent and most any other unforeseen element that can, and most often does, rear its head.
When choosing an agent, make sure s/he:
1. Knows the area in which you’re looking.
2. Is available by cell phone everyday and will call you back in a timely manner.
3. Can explain offer strategies, the escrow process and field any related questions.
4. Has relationships with quality vendors (lenders, inspectors, etc).
5. Has a positive and determined attitude.
6. Is with a reputable brokerage.
7. Is a Realtor®
What’s the difference between a Realtor and a real estate agent? Realtors® are members of the National Association of Realtors® as well as a local association. We are held to a strict code of ethics and offer unique tools. A real estate agent is someone who has a real estate license but has not joined an association. All Realtors® are real estate agents but not all agents are Realtors®. Make sure yours is.
There are some amazing lenders out there and there are some that will kill your escrow. To get an offer accepted when you’re coming in with financing, it is CRUCIAL to keep the following in mind:
1. Have your credit score, bank statements and tax returns at the ready. If your chosen lender hasn’t requested a full set of documents from you, RUN!. In order to accurately pre-approve you for a loan, the lender has to input a significant amount of information into his/her database. Then, and only then, can your pre-approval be considered accurate. Pre-approvals are not guarantees and lenders will remind you of this with very specific verbiage. What you DON’T want to happen, and what happens way too frequently, is to have a lender who hasn’t done the work at the onset. Several weeks into escrow, when it comes time to go to underwriting, the lender finally inputs the rest of the data and finds that you don’t qualify for the loan amount for which you were originally pre-approved or, more commonly, there are new resulting snafus that need extra time to correct. The home then either becomes unaffordable or escrow has to be delayed. Delays can be common, however, in a Seller’s market, there are most likely several backup offers waiting to get your spot. It’s best to hedge your bets and avoid as many speed bumps as humanly possible.
2. AVOID THE ABOVE by using established and trusted lenders. I refer excellent lenders with whom I’ve worked and trust. They are excellent in their communication, products and expertise. By suggesting lenders I’ve worked with and trust, I ensure that you are being represented by the best and avoid potentially unnecessary and costly delays.
3. Be sure your lender is accessible by cell phone or email, 7 days a week. If you need a pre-approval on a Sunday, you need someone who can deliver same-day or you risk losing an opportunity.
4. Banks or Loan Brokers? Banks are notorious for long escrows and lots of unnecessary red tape. Plus, they’re limited to certain types of loan products and may not have the loan which most works in your best interest. Long escrows = more risk for a Seller so the shorter escrow, the higher the chance of getting your offer accepted. Very few banks can promise a short escrow. Anything more than 30 days can present an unnecessary obstacle.
***Some of the major banks are offering incredible rates and timetables for certain types of loans. I have found (and worked with) some excellent reps who I can recommend if a client prefers to work with a major bank. They are available by phone 24/7, can get a pre-approval letter out quickly and meet tight timelines which makes your offer much more attractive to a Seller.
The All-Cash Offer
This is the golden goose of offers. Sellers love cash offers since they don’t have to deal with a lending institution or the risk of an appraisal coming in lower than an accepted offer. All-cash transactions usually have short inspection periods and very short escrows. If you’re going to be making all-cash offers, you can skip the next point.
Terms are important and can make or break a comparable deal. The highest price doesn’t always win the property. There are several terms in the offer contract which can be tweaked to be more attractive to the Seller while still keeping you protected, and thus, increasing your chances of an accepted offer. Make sure that your Realtor® has this strategy down pat.
Researching The Comps
In this market, the comps serve the Sellers in pricing their property. The market value of a property, in terms of getting an offer accepted, is not in the comps but in how much a Buyer is willing to pay for it. In a Buyer’s market with few Buyers and lots of inventory, you can use the comps as leverage but this strategy is counterintuitive in a Seller’s market and can hurt your chances. The best question to ask yourself when deciding how much to offer is, “How much is this home worth to me?”
It’s a tough market but Buyers are snagging properties left and right. Real estate is exciting and buying a home fulfills a large part of the American dream. It can be an emotional process and quite a ride but it will never be boring. Build a good team, stay positive, committed and realistic and you’ll find the home you’re looking for.