6 Ways to Get Your Offer Accepted in a Competitive Market
Homes are in high demand these days. The only problem? There aren’t many to choose from.
Unfortunately, that’s led to an incredibly competitive market — one where prices are rising and offers are often met with steep competition.
For most buyers, that means losing out on a few properties — sometimes even a few dozen — before getting an offer accepted and locking in that dream home.
Are you dealing with a similar situation? Tired of putting in offers only to get jilted time and time again?
Here are six strategies that might be able to help you get your offer accepted
1. Include an escalation clause.
Escalation clauses are a great way to increase your offer without paying more than is necessary. Instead of simply making a bid $50,000 above the listing price, an escalation clause lets you increase your bid incrementally — and only if you’re outbid by another buyer. You can also set a limit, so your bid can only increase so much (based on your budget).
2. Get a fully underwritten mortgage approval first.
Preapproval is a great first step, and it can definitely give sellers more confidence in your offers. If you want to take it a step further to get your offer accepted, consider a fully underwritten approval, too.
With these programs (like Embrace’s Approved to Move™ option), you submit all the required paperwork and documentation upfront, and the lender verifies your information and processes and underwrites your loan — before you’ve even found a home. Once they’re done, you have a ready-to-go, fully underwritten loan.
Fully underwritten offers are a great way to stand out with sellers and assuage any fears about financing (or it falling through). You might even consider skipping the financing contingency if you go this route. Data shows it can increase your odds of winning by 66%!
3. Make a cash offer.
If you can make your offer in all-cash, that’s definitely the best route to get your offer accepted. According to analysis from real estate brokerage Redfin, all-cash offers increase your chances of winning a bidding war by a whopping 290%.
The reasons for this are many, but the certainty, speed, and ease that comes with all-cash transactions are the biggest perks for sellers, and many will even accept lower offers because of all this. In fact, a recent study from the University of California-San Diego shows that cash buyers pay about 12% less than ones using a mortgage.
The catch here? Most of us don’t have a few hundred thousand dollars lying around.
4. Write a killer offer letter.
Sellers are getting a lot of offers these days, so anything you can do to personalize yours might help. One way to do this is by writing an offer letter. These are written directly to the seller, and they give you a chance to talk about your love for the home, your home buying journey, and how perfect the place would be for you and your family.
Keep in mind, though, that these types of letters can sometimes backfire. Your real estate agent may prefer to have you not write a letter because they can sometimes lead to discrimination and violations of the Fair Housing Act.
5. Remove contingencies (within reason) to get your offer accepted.
Removing the financing contingency (with a cash offer or fully underwritten loan) is one way to up the ante, but there are other contingencies you can remove, too.
Skipping the appraisal contingency, for example, can be one way to get a leg up on other buyers, as can forgoing the inspection. Just make sure you talk to your agent about these actions first, as they could have costly repercussions.
6. Offer a rent-back.
Many sellers are also buyers, and like you, they’re probably having a hard time finding a new property. If that’s the case with your sellers, a great option to get your offer accepted is the rent-back (also called a lease-back). This allows the sale to proceed but also lets the sellers “rent back” the property from you until they’re able to find a new home and move out.
The sellers will typically pay you a per-day rate to rent the home, and they’ll also cover utilities and maintenance while they remain there as well.
The bottom line about getting your offer accepted
This market might seem challenging, but all hope is not lost. Just employ some of these handy strategies, talk to your real estate agent, and consider a program like Embrace’s Approved to Move™. Anything you can do to stand out can help.
Get in touch with an Embrace loan officer in your area today to discuss your options.