6 Tips to Help Get a Buyers Purchase Offer Accepted

By
Mortgage and Lending with Citywide Financial Corp

In today's competitive market where multiple offers are the norm, it is very important that a buyers offer stands out from the crowd so it is given every chance of getting accepted! Buyers and agents need to be creative with their offers too and also provide full transparency upfront, so the seller will feel comfortable that a buyer will be able to close escrow. Here are 6 tips that you can use that will strengthen a buyers offer and ensure your purchase offer stands out from the crowd.

 1. Write a Strong Cover Letter For the Buyer

It's a good idea to submit a detailed cover letter with the offer explaining a quick synopsis of your buyers situation and why they are the right candidate to purchase this home. Also, it is important to address any red flags in the buyers profile, so the seller is not put off by anything in the buyers profile.

For example, if a buyer is converting their current property to a rental but there is no equity, the buyer has to qualify for both mortgages according to current lending rules, and most folks can't afford both mortgages these days, so this throws up an immediate red flag. But, let's say you have a VA buyer and the military has requested them to transfer, did you know that this VA buyer does NOT have to have the 30% equity in the property they are converting to a rental and are only required to qualify for the new mortgage?

This is just one example whereby you can make it easier for the person approving the offers by explaining your buyers situation.

2. Make sure the pre-approval letter advises what type of financing the buyer is getting

Make sure to provide a pre-approval letter that explains what type of financing the buyer is getting and how much of a down payment they are using. For example, if the buyer is qualified for conventional financing and is putting down 20%, make sure to write this into the pre-approval letter, as this will usually place ahead of a VA purchase offer that has no down payment requirements, or a FHA buyer that has a 3.5% down payment.

If the buyer is submitting a FHA or a VA offer and is usign a limited or no down payment, make sure to follow the rest of these tips to strenghten the buyers offer, so it has a better chance of standing up against the conventional offer with 20% down.

3. Provide a DU Underwriting approval with the offer

Make sure your offer is accompanied by a DU underwriting approval. A DU approval is when the buyers loan application has been ran through Fannie Mae's, FHA's or VA's automated DU underwriter (Desktop Underwriter) and was issued with an approval.

A DU underwriting approval displays the most important information needed on a buyers profile to give the seller a good idea of the strength of the buyer. For example, a DU approval lists the buyers credit scores, debt to income ratios, assets, down payment and the type of loan program they are approved for.

Also make sure the terms on the DU underwriting approval matche up with the loan program that is listed on the buyers pre-approval letter, (see # 2 above).


 

4. Provide proof of down payment funds

Always provide proof of where the down payment funds are coming from for the buyer. Make sure to send over recent bank statements or statements from any account they are using for the down payment. Make sure there are enough funds in the statements you are providing to match the down payment listed on the offer.

Or if the buyers are going with FHA and are getting a gift from a family member, make sure there is a gift letter provided with the offer. Most offers I review do not have proof of funds provided, or there are not enough funds to cover a 20% down payment and 2 months reserves for example, so make sure there is always enough funds to support the offer.

5. Make sure everything on the buyers offer is current

It is not uncommon these days for a buyer to be submitting offers for up to 3-4 months before they find a home, so sometimes the pre-approval letter or the DU underwriting approval has a date that is a few months old. 

So make sure all the dates on the buyers approval letter, DU approval and all funds provided are current and within the last 30 days.

6. Don't ask the seller for credits to cover closing costs

A purchase offer asking for seller credits to pay for a buyers closing costs will usually always place behind a buyers offer that does NOT ask for any seller credits! Most people assume because a buyer does not have funds for closing costs, just ask the seller to cover them. SOLUTION: To make a buyers offer more competitive, we can pay for ALL the buyers closing costs with a lender credit!

How does this work? It's easy, instead of taking let's say a 3.25% 30 year fixed rate on a FHA loan, the buyer will take a slightly higher rate of 3.5% instead, and with this higher rate there is now a lender credit of roughly 2.5% available that can be used to pay ALL the buyers closing costs.

Not only is this a good negotiating tactic, but of course it saves the buyer a lot of money too if they do not have the funds to pay for their own closing costs! I present this option to all our buyers!

We can close your transactions in 17 days

Being able to close a transaction fast is one way to entice the seller to accept your offer in this competitive market! For example, if a seller is reviewing 3 offers, and there is a 17 day offer, a 30 day and 45 day offer, more than likely the seller will take the fastest closing. Therefore being able to close faster is a strategy that you can use to help get your buyers into contract! My company can close a Conventional Purchase Transaction in 17 days (FHA and VA in 21 days), as I have an outstanding team set up with 2 assistants dedicated to close transactions fast!

I hope you found these tips useful. I review offers for several of my agent partners and the majority of offers I review only have 2-3 of these items above provided. I believe that full transperancy upfront is the key to getting an offer accepted, because usually the "Path of Least Resistance" is what I look for when reviewing offers! Many times the offer that is presented the clearest and addresses issues upfront, is usually the offer that will be picked!

If you have any questions about any of these tips above or you would like to chat about closing your transactions faster, please do not hesitate to contact me directly at 858-200-9602.

P.S. If you want to be updated faster on any new loan programs that come out, join my Facebook Page Free Resources For Real Estate Agents. There are now over 5,900 Real Estate professionals sharing content and tips on this page.

Comments (2)

Diane Beaumont
Benchmark Mortgage - Woodland Park, CO
USDA,FHA,Jumbo,VA Woodland Park, CO Mortgage

All excellent points.  Thanks for the post!

Feb 27, 2013 02:00 AM
Michael Deery
Citywide Financial Corp - Pacific Beach, CA

Thnak you Diane, I appreciate your feedback!

Feb 27, 2013 02:13 AM