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Top 10 ways to strengthen your purchase offer and beat out competing buyers Going above the asking price doesn't always sweeten the deal PUBLISHED ON AUG 8, 2014
BY ACTIVERAIN
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This post by real estate agent Janna Scharf, of Keller Williams Realty Coeur d’Alene, was originally posted on ActiveRain. I just finished up with my fortunate seller client who had the difficult task of deciding which one of three excellent offers to accept for the purchase of her home. That’s right, three outstanding offers.
I had a conversation with the agent for each potential buyer and explained the following to them: There will be three competing offers. The seller is doing a Home Affordable Foreclosure Alternatives-approved short sale. There was no point in running the purchase price up above the fair market value that Wells Fargo was willing to accept, which was the listed price. The seller is not going to receive any of the sale proceeds. What would be the deciding factor for her is the strength of the buyer, and their willingness and ability to hang in for the duration. I suggested each of them do whatever they could to strengthen their offer in every possible way.
House for sale image via Shutterstock. We ended up with three excellent offers, essentially all full price. How to decide? We could have used a dart board, because the fact is they were all great. I pulled out my legal pad and started splitting hairs in a side-by-side comparison. Sometimes I think buyers and their agents don’t realize that there are many different ways to strengthen a purchase offer besides just the obvious one, the purchase price. This is always something to seriously consider when making any offer, whether or not competing with other buyers. What follows are some things a savvy buyer will consider when making a purchase offer in any situation. Top 10 ways to strengthen your offer: 10. Present it in person. This seems to be a dying art in my market. Almost never happens. There is just something about making the effort to come hand me the offer in person, make eye contact and explain a bit about the buyer. I always attempt to present offers in person, and at the very least will include a letter to the seller’s agent and seller telling a little bit about my buyer, what they love about the house and pointing out the strengths of our offer. 9. Include any requested addendums and documentation with the offer. In this case, I had requested the offer be submitted along with some addendums I had made available to agents in advance by uploading them into the MLS. Specifically, a short-sale addendum, a Wells Fargo affidavit, as well as the Property Condition Disclosure. One of our potential buyers failed to include any of the requested documents. In a side-by-side, hair-splitting comparison of offers, this was a negative. We didn’t know FOR SURE that they wouldn’t find something on the PCR they would object to, or that they would be willing to wait for third-party approval. Just a couple of little question marks hanging out there that could have easily been eliminated. 8. Include proof of funds to close if a cash offer, or a lender’s preapproval letter. One of our offers was accompanied by a very strong lender preapproval letter. One of the cash offers was accompanied by a very impressive proof of funds to
close. When I asked for proof of funds for the third offer, also cash, I was told that the buyer would submit proof of funds necessary to close only after her offer had been accepted. Would you be surprised if I told you this was the same buyer who wasn’t forthcoming with any of the signed documents that were requested? 7. Inclusions. If you are competing with other offers, this is not a good time to ask the seller to include personal property in the sale. Especially if the refrigerator, washer and dryer are specifically excluded in the MLS information. Why risk losing your dream house over an appliance or some kitchen curtains? 6. Inspection contingency. In our case, one of the two deciding factors (remember that we are really splitting hairs here) was that one of the buyers waived their right to an inspection contingency. This eliminated one potential pitfall that could possibly arise down the road, of a buyer canceling their contract based on an inspection. Short sales are sold “as is,” but a buyer always has an opportunity to have a professional inspection, and rescind their contract if they find something unacceptable. This buyer felt that this was a reasonable risk given that the home was fairly new construction and obviously well cared for with no deferred maintenance. Short of eliminating it altogether, a good way to strengthen any offer is to shorten up, as tight as possible, the length time you are requesting in which to perform an inspection.
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SWICK Realty With a tight market for good, clean homes these are great points for buyers to help make sure they get the house that they want when they do find it. Like · Reply · Aug 8, 2014 7:46am
Terry Spear · Real Estate Sales Agent at Nu Home Source Realty LLC Good points. Like · Reply · Aug 8, 2014 8:34am
Elizabeth Weintraub · Guide / Columnist at About.com I have two points to add: 1) It's probably a good thing the seller passed over the friend option but not because the friend was obtaining an FHA loan but because the Wells Fargo short sale addendum requires an arm's-length transaction. 2) Further, there often is something that will prevent a sale immediately after closing, most HAFA transactions require a waiting period to transfer. Like · Reply ·
4 · Aug 8, 2014 10:30am
Janna Rankin Scharf · Coeur d'Alene High School Elizabeth Weintraub, how right you are. This isn't a comprehensive list, and your points are correct. So many variables, depending on the type of short sale and specific terms dictated by the lenders for each unique borrower. Like · Reply ·
1 · Aug 8, 2014 11:08am
Barry Taylor · Realtor at Weichert Realtors Loudoun County A clean and unambiguous offer always trumps those where the agent to trying to be too clever or lazy sometimes. Like · Reply ·
2 · Aug 8, 2014 12:27pm
Sue Paerels - NJ Mortgage Store - NMLS 340466 Wonderful advice! Like · Reply · Aug 8, 2014 1:38pm
Lance Brown Also: 1) Finding out from the Listing Agent what the sellers' really value, and 2) Good, timely comms by the Buyers' Agent with the Listing Agent. Like · Reply · Aug 13, 2014 12:21pm
Les van Alstine · Grand Poobah at Self Employed (Business) Of course they could also waive any other fees or services from the Agent. It just seems that not having an inspection, for those reasons stated in the article, is poor advice. Especially when the agent did not offer to cut their commission by a few hundred dollars. PS: I am a long time ASHI home inspector.
hundred dollars. PS: I am a long time ASHI home inspector. Like · Reply · Aug 13, 2014 2:46pm
Chris Prickett · Owner and Realtor at Prickett Realty Waive the inspection? NEVER, not even on "fairly new construction". Before becoming an agent, I was an inspector who specialized in new construction as well as forensic inspection for a construction defect litigation attorney. I would make the argument that newer homes have more chances of having major structural issues than older homes, which have had time for these defects to become blatantly obvious. As agents, we sometimes need to protect our clients from themselves. Like · Reply ·
3 · Aug 18, 2014 3:26pm
James Kellerman · C-TEC of Licking County I can agree with that. My home was constructed when things were slow in 2011. And they literally put the house up and closed in 90 days, Actually 30 of the days was waiting for loan stuff and then they started. They laid the foundation on October 14 and closed December 9th. Way too fast in my opinion. so i e. Sold it to take a job elsewhere and looking to buy there. Like · Reply · Feb 12, 2016 2:33am
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