5 Ways to win your offer in 2022!

5 Ways to Win Your Offer as a Buyer in 2022

Are you looking to be a home buyer in 2022? Hi, my name’s Erika Hagfors, and here are five things to consider when writing an offer on a home in a strong seller’s market. Number one, list price is a starting point. If you are looking at homes fresh on market and there is a lot of interest, maybe an offer deadline has been set, that price is only going to go up. With multiple offers, buyers are trying to be as appealing to the seller as possible, meaning that you’re going to offer over that list price sometimes by as much as 50 to 100,000 depending the home location, condition, upgrades, all of that. So if you want to be smart and competitive, drop the price band that you’re looking at by 25 to 50,000 and look at those homes so you can be competitive price-point wise when making an offer.

Number two, be prepared to ask for little to no repairs. I know it sounds scary and this is where viewing the home and really looking at the home when you get to see it is going to be important. Have questions asked, have your agent asking the condition of the roof, the furnace, all the systems of the home, look at the history of the home to see what updates have done and how it’s been maintained. Check county records for any permits that have been pulled so that you have a really good idea of what that home’s condition could be like. Things will always pop up and those can always be points of discussion, but it is very important to sellers right now that they’re not nickel and dimed when they get these above-asking offers. Unfortunate as it may be, that is what our market is right now. So be prepared to either say you’re taking the home as-is, no repairs, or that you will not ask for repairs past a certain dollar amount and have that dollar amount set in your head.

Number three, be prepared to waive your appraisal or include some appraisal gap coverage. What that means is if you are given financing for this property, the bank is going to do an appraisal and they will lend to you based on that appraisal. When you go above the list price, sometimes there can be discrepancies in the appraisals and they can come in under what you’re offering. This is where the seller, again, wants to know that there’s some security and that you’re ready to put your money where you mouth is. And if you’ve offered $50,000 over asking, they want to know that that $50,000 is going to come to them. It’s part of why they’re accepting your offer and they don’t want it to be a negotiating point once they’re under contract and maybe have turned down some other offers. So you can either include some gap coverage saying that you’ll cover an appraisal that’s maybe $10,000 low, $20,000 low, whatever works in your budget, or if you’re a strong enough buyer or you’re comfortable enough and you’ve got the reserve funds you can just waive that and say that you’re willing to move forward even if the appraisal comes in low.

Number four is rent back. Rent back is a big one, especially in this strong seller’s market where it’s very hard to get a contingent offer accepted. We see a lot of times that if it’s an occupied home that you’re writing on, they’re going to need some possession after the close of your escrow. Sometimes that’s done at your cost, whatever you’ll be paying in your mortgage. Sometimes it’s done at a reduced rate. Obviously, the sellers like it if it can be done for free. But that’s something to have a conversation about. Every property is going to be a different situation but generally if it’s an occupied home, you are seeing the rent back being offered to the seller just in case, so they don’t have to move twice.

Last but not least is the lender. Now in a strong seller’s market, every term is important and your lender can be the make or break situation. When I’m choosing lenders to work with and recommend to my buyers, the most important things are that they are competitive, that they have great communication, and that they can get the job done on time if not early. That’s how I know that I can sell my buyer to the seller every single time. I’ve had to be making the difference and getting offers accepted. So listen to your agent. When it’s time to choose a lender, if you are coming in unapproved, make sure you take the recommendation and see if they can be as competitive. The big banks just can’t operate in a timely manner, and if you have a vacant property and they want a three-week close, a lot of times the big banks just can’t do it, and that could mean the difference between getting your offer accepted and having to write more offers on different properties.

So these are five things that are very important. There are other things to consider obviously, but take them to heart, think about them. It is a tough market out there, but with the right agent, right lender, right team (us!), you can get that done.