Even though interest rates are rising in the United States, the housing market hasn’t cooled. Demand is still high for homes, and buyers continue to outnumber sellers. When you’re making an offer on a home, it will likely be one of many. In such a competitive market, how do you make your offer stand out so that you can win a bidding war? Here’s what you need to know to seal the deal.
Offer more than the asking price
One of the easiest things to do to make your offer win out amongst the competition is to offer more than the asking price of the home. Most homes in today’s market are selling for over the asking price because there are so many buyers competing for the same home. Keep in mind, however, that you want to stay within your budget and offer an amount that is realistic for homes in your neighborhood. If you’re not sure what to offer, then lean on your real estate agent for advice.
Offer more earnest money
When you put in an offer on a home, you will also include an earnest money deposit. This is a good-faith deposit that shows you’re serious about wanting to buy the home. Typically, an earnest money deposit is somewhere between one and two percent of the purchase price. However, if you want your offer to shine, then consider making a larger deposit. It can be just the thing to capture the attention of the seller.
Make a big down payment
Saving money for a down payment is one of the biggest challenges in buying a home. But if you’ve got a substantial amount saved, then you could be in a good position. Offering to make a large down payment can help to ease a seller’s worries, making your offer more attractive. It also means you’ll have less to finance.
Limit your contingencies
Making an offer on a home often comes with several contingencies. Contingencies are conditions that must be met for the home sale to close These contingencies can include a financing contingency, a contingency that you must sell your own home first, or an inspection contingency. If you limit the number of contingencies for your offer, then it can be more attractive to the seller. Fewer contingencies mean fewer obstacles to getting to the closing table. Just be careful about which contingencies you waive, such as the home inspection contingency. When in doubt, talk to your agent.
If you have any flexibility with the home purchase, then make that clear in your offer. Perhaps you have wiggle room when it comes to your move-in date. Let the seller know that you can be flexible about that date. This alone could give you the competitive edge you need in today’s market.
It probably goes without saying, but if you can afford to pay all cash then your offer will most likely win out. Paying cash makes it easy to get to closing – you don’t have to jump through all the hoops of getting qualified for a home loan.