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Are you beginning the home buying process?
What Can An Experienced Buyer Agent Do for You?
You're about the make the most expensive purchase of your life. You should have an experienced advocate on your side. Your buyer agent should know how & when to use the tools in their negotiation toolbox. Ideally, your agent will be experienced and have a clear understanding of market conditions. But in order to "win" in a negotiation, your buyer agent needs you! In fact, the home buyer is the driving force in every contract negotiation.
Here are a few strategies to know before you write a contract
- Escalation Clause - This is an addendum to a contract that offers more than the list price. The escalation clause is used in competitive situations when there are multiple contract offers. Typically, the escalation clause moves the sales price up incrementally and has a cap. If a buyer has plenty of cash, they may be able to use the clause and waive the appraisal contingency. This type of offer is typically used in a competitive situation.
- Pre-Contract Home Inspection - When you are competing with other home buyers, a pre-contract home inspection gives you information about the home before you write your offer. You schedule the home inspection quickly before the seller and listing agent say they are reviewing offers. If the inspection goes well and you approve of the results, you can write an offer that is not contingent on the home inspection. To be clear, this means you will not be asking the seller to repair or offer credit for anything. Of course, this is very attractive to a seller but you must understand that you are buying the home "as-is". We've done this several times in competitive situations with success. You pay out of pocket for a home inspection. If you are not pleased with the report and you decide not to write an offer, you've paid a couple hundred dollars or more that you don't get back. That's the risk of a pre-contract home inspection.
- Free rent back & flexibility with the settlement date - This works well when the homebuyer doesn't need to sell a house but the seller needs to buy their next house. For example, the buyers are paying rent month to month and the seller bought a house but needs somewhere to live until they settle on their new home. Buyers and Sellers agree to a settlement date. After the settlement, the home buyers agree to allow the sellers to live in the house for a specific number of days. The settlement company holds the seller's deposit which they get back once they move leaving the house in good condition. The free rent back option needs to be carefully considered. For one thing, the home buyers become landlords for a few weeks. This isn't an easy idea for many home buyers so take time to consider this option and talk to your buyer agent.
- Large earnest money deposit - The earnest money deposit is what the home buyer puts up to show the seller they are "earnest" about purchasing their home. The emd check is typically 2-3% of the list price (in the Washington DC area) but if you can write a larger check, it may make the difference between your offer and another. When a contract is ratified, the emd check is deposited by the settlement company into a non-interest bearing escrow account. The money stays on the buyer's side of the ledger covering part of the buyers down payment.
- Make the first offer - We've won a deal simply by being first. Make sure you are getting daily or instant auto updates from your buyer's agent. These listings come from the Multiple Listing Service and will be the most current & accurate updates on properties listed by a brokerage. When a house comes on the market that you like, see it that day! If you can't see it the first day, ask your buyers agent to visit the house and take video. A first day on the market full price offer with a strong emd check is very attractive to a seller.
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