Special offer

Getting outbid? 5 Ways to make your offer stand out!

By
Real Estate Agent with Mike Russell Real Estate Group SP00225692 Kansas

It's the middle of summer and the real estate bidding wars are in full swing. The combination of historically low interest rates and a lack of available homes for sale is fueling an unpresidented buyer frenzy. In comparison to one year ago, interest rates are down by over 1% and the inventory of homes for sale is down a whopping 40%. This is leading to desperation amongst buyers to secure hot new listings.  A recent survey showed that almost 60% of available home listings are receiving multiple offers. If you want to win a bidding war and don't have infinite cash you will need to be creative, here are my 5 top ways to win that bidding war.

Find Your Dream Home Now

Get Fully Pre-Approved- When you first meet a mortgage lender they will have you fill out an application, whether it is online or in person the first thing they will do is run your credit report and submit your application to an automated approval system. This system can tell them very quickly if you can or cannot be approved for a mortgage, if the automated system approves you then you are considered pre-qualified. However in this uber competetive market you need to go further.

Getting Pre-Approved will make your offer stand out amongst the other home suitors. In a full pre-approval the lender will collect your most recent pay stubs, bank statements and tax returns, all of this information will be provided to the underwriter who makes the final decision on whether your loan is approved or not. After reviewing and verifying all of your infomation you can be fully pre approved. If you were a seller, would you choose an offer from a pre-qualified buyer or a pre-approved buyer?

Get Pre-Approved Now 

Earnest Money- This is the deposit that is held in escrow while you are performing your due diligence. It will be held by the title company and credited to you at closing towards your down payment or closing costs. While a $1,000 earnest money deposit is adequate for most houses, in a competive situation you will want to offer more. A larger earnest money deposit shows that you are serious and committed about the offer you just made.

Adding an Escalation Clause- When a home get's into a bidding war, it can be hard to know what other buyers offered. You may be willing to offer $20,000 more than list price but would be upset to find out the next highest bid only offered $10,000 more. With an escalation clause you can offer a specific price and then add a clause that says "Buyer will pay $1,000 more than any verifyable offer up to a specific price. This allows you to hedge you bet against way overbidding the next closest offer.

Meet our Incredible Home Inspector

Accepting in As-Is Condition- This is not for the faint of heart, the idea of agreeing to accept a home with all of its faults can be very scary. Accepting as-is doesn't waive your right to home inspections and doesnt waive your right to cancel if the inspections turn up major deficiencies. Willingness to accept a house as-is can be very enticing for sellers, most sellers don't want do repairs to their home right before closing and offers that agree to accept their home without repairs get moved to the top of the pile.

Agreeing to make up Appraisal Shortage- When buyers start making offers that exceed the list price, sellers get worried about the possibility that the home may not appraise for the price offered. To help alleviate this concern you can add a clause to your offer stating you will make up for the shortfall in the appraisal. This can be the full amount or a certain portion, the only negative is that you will need to have the extra cash to put down over and above the down payment you already planned to bring.

While these are great ways to make your offer stronger, nothing replaces an experienced negoitator on your side. Mike Russell & Associates has over 20 years experience and we know how to get your offer noticed by the seller and accepted over competing offers.

 

 

 

Posted by

 

 Mike Russell is a REALTOR with Keller Williams Realty. Mike specializes in Johnson County Kansas Homes and Real Estate for sale. Mike is a tech savvy realtor with over 20years experience. Did you enjoy Mike's Blog? Feel free to subscribe or join Mike on his Social Network to stay up to date on Overland Park, Olathe, Leawood, Lenexa, Shawnee and all of Johnson Counties real estate news and more...

Mike Russell Real Estate Group can be reached at 913-266-5828 or MRussell@KW.com  or www.SearchjocoHomes.com

                        facebook   Twitter Overland Park Realtor  Linked In Russell Home Team  You Tube Russell Home Team  

 

  

 

 

Comments (2)

Lanette Branch
Taylor Properties - Bel Air, MD
Bel Air, MD Real Estate Agent

Thank you for such an informative post, Mike Russell. We really can't emphsize the importance of pre-approval enough, though!

Jul 14, 2020 10:28 PM
Richard Weeks
Dallas, TX
REALTOR®, Broker

Great information, thanks for sharing.  I hope you have a great day.

Jul 15, 2020 03:25 AM