14 Ways to get your offer accepted
How do you get your offer accepted in a hot seller’s market? Find out how!
#1 Non-Contingent Offer
The #1 way to get your offer accepted in a hot seller’s market is to make your offer non-contingent on the sale of a home. If you own a home already and you’re needing to sell that home first to buy that replacement home, you cannot make the offer contingent on selling your home. Maybe if you’re in escrow and you’re closing in two days and you still want to throw a contingency on there, potentially could do that.
But otherwise, it’s just not being accepted in today’s hot seller’s market here in San Diego. Make sure that you prepare for that. And there’s different ways to overcome that. Ways such as moving into a short term rental, giving yourself a rent back when you’re negotiating with a buyer on your home. To sell that home, you have time to find a replacement home and move out.
Another great way to overcome this is with our “buy before you sell” one Trade-in Program that we offer through a partner. This allows you to actually buy your replacement home first, using the equity from your existing home, move into it, and then sell that home. If you’re interested in that, please reach out and let’s talk about it.
#2 Turn Yourself into a Cash Buyer
The second thing to do is to turn yourself into a cash buyer. If you’re financing the purchase of your home and you’re concerned about getting beat out by cash offers, You can use our Cash Offer program, to turn yourself into a cash buyer. This is a powerful program to become a cash buyer and get your offer to the top of the pile.
#3 Reduce or Remove Appraisal Contingency
The third thing to do is to remove or reduce your appraisal contingency. The appraisal occurs when you are getting a loan on the home, a lender will order an appraisal and they will evaluate the value of the home to make sure that they’re not lending too much on the home. Well, in today’s hot seller’s market, it’s very common for homes to sell over ask price. And so sellers are concerned that the home may not appraise for the value that you’re offering out.
Be prepared for doing one of two things: first is to reduce the appraisal contingency. The standard is 17 days. You want to get that down closer to 10-12 days ideally. The second thing is to remove that appraisal contingency entirely! Meaning you are willing to come up with the cash to cover the difference between what the home appraises at and what you are buying it at. That can be difficult for a lot of people. But that is certainly a way to get your offer accepted. In fact, right now, most offers are not being accepted unless they have the appraisal contingency removed or at least some sort of a gap coverage in place.
#4 Reduce or Remove Loan Contingency
The fourth thing to do is to remove or reduce your loan contingency. The standard for a loan contingency is 17 days. You definitely want to get that down to at least 14 days, preferably 10 or 12 days. If you’re working with a lender that can move quickly during the escrow process, you can certainly do that. The lenders that I work with are able to do that. That’s going to put you in a stronger position, the shorter, the loan contingency, the better going back to the appraisal contingency, reducing contingency periods. It gives the seller more assurance that you’re going to close on the home quickly, and that you’re actually gonna be able to do it. They know within 10 to 14 days that you’re going to be able to purchase the home. This is why we’re reducing loan contingencies.
The other option is to remove the loan contingency entirely. If your lender has given you a fully underwritten preapproval and they feel fully confident that you’re able to close on the loan, then you could go ahead and remove that loan contingency. You have to feel comfortable with doing that, but some of the lenders that I work with do give fully underwritten pre-approvals so that you can be confident knowing that you will absolutely close on that home. That can certainly be a winning strategy because it alleviates the fear that a seller may have. You may not be able to actually obtain financing and helping you compete against cash offers.
#5 Reduce Inspection Contingencies
The fifth way is to reduce the inspection contingencies. I generally would not recommend that you waive your inspection entirely. You always want to get in there with a home inspector to evaluate the home and find out what underlying issues there might be, that you’re just not aware of whether that’s foundation issues or problems with the windows or problems with the major systems. You always want to know what you’re getting into, but you want to make that as short of a period as possible, typically 7 to 10 days so that we can get through it quickly and move on to the loan contingency and the appraisal contingencies and close on the home.
#6 Provide a Rent Back to the Seller
The sixth way is to provide a rentback to the seller. This might be a combination of free or paid rent back. Now we can’t go over 60 days unless you’re coming in with a cash offer. Otherwise it turns into an investment property and investment loans, which is a whole other ballgame.It might be 2 weeks of free rent back or a month of free rent back. And then maybe a couple of weeks of paid rent back, some combination there up to give the seller a time for them to move out and onto their next home.
#7 Call the Listing Agent
The seventh thing to do is to make sure that your agent is calling the listing agent and building rapport with them. They should be finding out what is truly important to that seller. Is it a reduced escrow? Is it a paid rent back? What is it that’s important to them? Is it simply the highest price? Then they should continue to build that rapport so that they know that when you submit your offer, your serious, agent is super communicative and they know that it’s going to be a smooth escrow process and they’re going to get the deal done. That’s always the most important thing at the end of the day is to get the deal done or both parties.
#8 Reduce Escrow Length
The eighth way to get your offer accepted is reducing your escrow timeline. Typically an escrow is going to be 30 days. Oftentimes sellers want to get their money sooner. So you may want to go in at 21 days or maybe even 17 days. If you’re going cash, 10 to 14 days, and then this can come back into combination with that rent back. They get their money sooner, say, 17 or 21 days, and you close escrow. They know the deal’s done, they got their money, and then you give them the rent back. So they have time to move out. That can be a fantastic combination to get your offer accepted.
#9 Pay over List Price
The ninth way is to be prepared, to submit over list price in a hot seller’s market. It’s super common for the list price to just be the opening bid amount, be prepared on single-family homes to be paying $25k, $50k, $100,000 over the list price sometimes higher, but just be prepared for that. With condos, it tends to be less. Somewhere in the $15k to $25k, sometimes $50,000 range, but just be prepared to pay over list price, especially when you’re competing as multiple offers. If there’s more offers, there are the higher the price tends to go.
#10 Escalation Clause
The tenth way is to submit with an escalation clause. Say the home is $800,000. You come in with an offer at $845,000.
Assuming there are other bids on the house, you get countered in a multiple counter situation. You come back with an escalation clause where you say, “I am willing to go to $875,000 but only if you can verify and prove to me that another offer comes in above my 845,000 purchase price.”
Let’s say that someone comes in at $860,000, and you have submitted an escalation clause to $875,000 saying you will beat another offer by say, $5,000. And someone offers $860k. You’re saying you’re willing to pay $865,000. So it’s a way to still come in strong, but hedge your bets a little bit.
#11 Purchase in As-Is Condition
The eleventh way is to purchase in an “as is condition”. Any purchase technically is “as is”, however you always have that home inspection and you can negotiate on the back end. Be prepared in general that you’re not going to get a whole lot in those negotiations. When you’re negotiating for Requests for Repairs through a home inspection in today’s hot seller’s market, you’re not going to get a lot. I’m very good at getting my clients as much as I possibly can. More than what most people will get either through credits or repairs, but just be prepared that sometimes you’re not gonna get it. Sometimes you can just go in and say, “Hey, I’m willing to purchase this as is. I’m still gonna get my home inspection, but I’m guaranteeing you. I’m not going to ask for a dime from you, whatever I find the home inspection.” Now, if you find something that’s really bad, really costly, your recourse is simply to walk away at that point if we can’t work it out.
#12 Non-Refundable Earnest Money Deposit (EMD)
The twelfth way is to submit with a non-refundable earnest money deposit or EMD. The earnest money deposit is typically 1 – 3% of the purchase price. You put this in up front, and it guarantees the contract. If you cancel without exercising one of your contingencies, your loan contingency, your inspection contingency, or appraisal contingency, you forfeit that money, but you have a lot of ways to get that money back.
If you go in with a non-refundable earnest money deposit right out of the gate, this is saying, “I am so confident and sure that I will purchase your home. I am willing to give you this sum of money right up front, no matter what, if I walk away, it’s yours.” Now you could go in and say, “Hey, I want three days.” And then it’s non-refundable it becomes hard. It’s what they call a “hard earnest money deposit”. And so this gives you a little bit of time to kind of have some second thoughts about it once your offer gets accepted, but then it becomes “hard”. you would forfeit the deposit if you walk away from the contract.
So what that means if you bought that $800,000 house, 2% of that purchase price is $16,000. And if you say, “Hey, I’m willing to give you a nonrefundable earnest money deposit.” The seller is basically guaranteed. That they’re going to make $16,000, whether or not you purchase that house. If you walk away, they get the money, but it can be a really good way to get your offer accepted. If it’s a really competitive situation.
#13 Pay Sellers Closing Costs
The thirteenth way is to offer to pay some or all of the seller’s closing costs. This is not necessarily increasing the price of the home, which gets into appraisal issues. Another way is to just say, “Hey, I’m willing to cover a closing cost for you.” That might be covering title, escrow, transfer fees for the seller, real estate commissions, so that the sellers have to come out of pocket for those things and they get more in their pocket. It’s going to cost you money, certainly upfront versus some of these other methods that are just giving reduced timelines and removing contingencies, things like that. It is going to be costing you money, but it can be a way to help put more money in the pocket and increase the likelihood of your offer being accepted.
#14 Look for Homes That Didn’t Sell Right Away
The fourteenth way is to look for homes that did not sell over the weekend. Even in hot seller’s market sometimes it happens. If there’s something kind of going on with a home, for some reason, buyers just weren’t quite into it, but maybe it’s the right home for you. The best time to look for those deals is on Tuesday and Wednesday on a middle of the week, because that is the no man’s land of selling real estate, and agents and sellers get really nervous from the home doesn’t sell over the first weekend. They’re thinking, what’s going to happen as they head into the next weekend or the next week? So that can be an opportunity for you to jump in and potentially be the only bidder on the home and get your offer accepted for a reasonable price.
#15 Bonus: Backup Position Offer
And finally, I’ll throw in a bonus the fifteenth way is that if all else fails, make sure to get your offer into a backup position. There’s actually a form for that, where you can be the formal backup position as an offer. So that if that number one buyer backs out, then you’re the first one in line to get your offer accepted with the terms you already negotiated, and you can get rolling on purchasing that home.
Those are all the different ways that you can get your offer accepted in today’s market. If I can help you buy a home in a competitive market or help you sell a home as well, please reach out to me via phone, text, or email, and let’s have a conversation.
Curtis Chism, Realtor
858-281-2568 | Mobile
mailto:info@sandiegohomes.io
Chism Team | DRE #02105113
brokered by eXp Realty | DRE #01878277
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