Yes, it is that time of year where the buying frenzy is in full force. Homes come on the market and are swooped up within days, and sometimes within hours.
And, Buyers are competing, making their best effort to become a homeowner.
What do Sellers look at when comparing multiple offers?
1. It's not always the price. Unless you are in a crazy escalating market like California where Buyers have high amounts of cash to purchase their home, most offers are still being financed. That means both the Buyer AND the property must qualify for the loan (a.k.a appraisal). A great real estate agent understands the risks in accepting an offer based on a way-above-the-list-price sales price. So unless the Buyer has the funds to pay the difference for a home that appraises lower than the sales price, and unless the lending institution doesn't care, the sales price might not play as important a role as one might think.
2. Terms matter. Of course, the larger the down payment, the stronger it looks to a Seller. Put a larger amount down as Earnest Money. If the norm for the inspection period is 10 days, reduce it to 7 or even 5 days. Have the quickest closing date. Ask the Seller's Agent when is the best day for occupancy for the Seller and put that date in the contract. Use the title company on the listing. Don't forget other things like closing costs, survey, title insurance and home warranty. Each dollar adds up and takes away from the Seller's net.
3. The Lender's actions are crucial. Most Buyers will have a pre-approval letter, which, for the most part, is not guaranteeing anything. However, if the Buyer has been totally pre-approved... income verified... employment verified... all documents turned in... only waiting for a home, then that is a stronger pre-approval letter. HAVE THE LENDER CALL THE Seller's Agent ASAP! This is crucial. A great lender will call the Seller's Agent immediately, giving confidence in the financing strength of the Buyer. Plus, it gives the Seller's Agent an opportunity to ask questions like "can you really close this loan within 21 days?" Powerful!
4. The personal letter. It really does help. If you are in a part of the country where personal letters are still accepted, take advantage of it. However, there is a word of caution. Keep things neutral, about the home and why the Buyer wants it. Be careful it does not violate any discrimination laws. Yes, there have been lawsuits.
5. Present the offer in person to the Seller if possible. Have the Buyer's Agent present the offer to the Seller in the presence of the Seller's Agent. Yes, face-to-face. Of course, the Seller and the Seller's Agent must approve, but it is worth asking. Who better to represent the Buyer than the Buyer's Agent. It is easier for a person to turn down a piece of paper vs. a person.
6. A short response time may not be the answer. Some think a short response time forces the Seller into making a decision. Unless the offer is outstanding, a short response time might actually be a detriment. Most of the time, multiple offers benefit the Seller. Why wouldn't a Seller wait and disregard any time constraints from an offer? A great Buyer's Agent will know the market well and know how to negotiate.
7. Be patient and keep looking. This is difficult for a Buyer who might be emotionally attached to the home. If an offer is not accepted, keep looking, saving more money to make the next offer stronger.
If you are considering BUYING or SELLING a home or investment property in the San Antonio, Texas area, give me a holler via text or phone. I look forward to helping you with your real estate matters.