In the current Seattle housing market, our low inventory of homes is creating bidding wars between potential buyers. Some buyers keep losing their dream home because they aren’t putting their best foot forward. This can be heartbreaking, so we want you to know how to put together a great offer (with your Broker) that lands you in the top spot.
Below are some tips on how to become the most desirable buyer and create a compelling offer that hopefully wins the bidding war.
Cash is still king – Sellers love all-cash offers because they’re less likely to have issues before the sale closes. Bring as much cash to the table as makes sense for your personal financial situation.
Get a head start – If you don’t have a bunch of cash laying around, you’ll need to get a mortgage. Three or four months before you start looking for a home, check your credit reports. This will give you time to look for errors, make disputes if there are mistakes, and pay off debts. Hopefully, this will improve your credit score and get you ready for a mortgage.
Get a pre-approval letter – Getting pre-approved by a bank, shows the sellers that a lender has verified your income and credit score and determined you can afford payments on a mortgage for a specific amount.
Bigger down payment – You want to put down a bigger down payment so you’re not out of the running against all cash offers. Talk with your lender and your real estate agent about the amount they think would work in your situation.
Make sure your documents are in order – When you submit your offer, you need to be prepared to show your proof of funds and where your cash is coming from, along with your pre- approval letter.
Don’t lowball – Put your best foot forward and submit your best offer! Make sure you and your Broker look at recent sale prices of comparable properties in the neighborhood so that when the property gets appraised, you know what to expect. You may only get this one chance to show the sellers your offer, so make sure you’ve thought about your number and are comfortable with it. You may not get a second chance to negotiate and may lose the property to another buyer.
Deep thought on contingencies – Some Brokers may advise you to drop all contingencies, but every situation is different. Most sellers prefer offers with no contingencies, but you need to think about the protection that contingencies provide if you want to cancel the deal. Your Broker should talk to you in detail about the good and bad of contingencies, including financing and inspections, so you feel comfortable with the outcome.
Escalation Clause- This clause lets you agree to increase your offer price if there’s a higher bid from another buyer. You’re able to write into the contract that you will offer, in increments, an amount more than the highest offer submitted. For instance, you can say you will pay $1,000 more than the highest offer the sellers receive and put a cap on that final amount you are willing to pay.
Write a letter to the Sellers-Tell the sellers a little about yourself and why you want to buy their home. You can even include pictures to make it more personal. You shouldn’t mention that you want to change their home or discuss money. You just want to make a personal connection so they will remember you when it comes time to pick the final offer.
Work with the seller’s schedule – Many times, sellers aren’t quite ready to move when the sale closes. You can offer them a “rent back” which allows them to stay in the house for a while. This can really help a seller out and move you to the top of the winner’s pile because you’ve chosen to make life easier for the them. Just remember that you will be their landlord for a short period and there are additional documents that need to be signed.
Trevor Russell from the Windermere West Seattle office who represented his client in a multiple offer situation which they won, states: “It’s important for buyers to put themselves in the seller’s shoes… Seller’s three main concerns are usually “how much, how soon, how certain???” Not always in that order and not always equal. Establishing a relationship with the listing broker and asking the right questions is crucial! I had clients who were renting with a very flexible lease. I asked the listing broker if the sellers would be interested in a “rent back”, meaning closing in 30 days, but then my buyers would allow the sellers to “rent back” the home for up to 60 days so they could find the next home they were going to buy. This made the sellers lives so much easier because they didn’t have to move twice or find a short-term rental. The sellers chose our offer over others with higher offer prices and better financing simply because we asked the right questions. My job is to put my client’s in the strongest position to win in this competitive market while protecting their interests.”
Work with a Trusted Advisor – As you’ve probably heard before, buying a home is one of the biggest decisions in a person’s life. With the added stress that you may be competing against multiple buyers to get the house of your dreams, you want to make sure all your i’s are dotted and your t’s are crossed. Having an experienced Broker work with you through the process can be priceless. They should talk you through the pros and cons of each decision and help you submit an offer that works for you and your situation.
If you are ready to start your real estate journey or have questions about how to get started, the brokers of the Windermere Wall Street Group would be honored to help you. Contact us today and let’s see if we can get your offer to the top of the pile!