As home prices continue to rise and inventory levels stay low, our current seller’s market signals stronger competition with more buyers fighting for fewer homes. In this scenario, making a perfect offer is key to securing a house. So what factors make your offer stand out from the rest?
Cash Offers Rule
If you can buy a home with a full-cash offer, you will win out over other offers with mortgage requirements. This isn’t an impossible prospect as 21% of homes purchased in 2017 were purchased with all cash according to the National Association of Realtors. The benefits are especially enticing for sellers because there are no mortgage issues, the escrow closes faster, and there is no appraisal requirement.
Preapproval & Prequalification
Getting preapproved from your mortgage lender confirms that you’re able to borrow the money necessary to finance the home. While not the same as a cash offer, it shows a seller that you’re not only qualified but also prepared and quite serious about purchasing their home. Another buyer may offer to pay more, but if they aren’t preapproved, you’ll have a leg up. Being prequalified, on the other hand, is not as powerful as a preapproval, but it’s still useful in the offer-making process. Prequalification is an informal nonbinding assessment that indicates you’re qualified financially.
Customizing the timing of the closing to suit the seller can often seal the deal over a higher-priced offer. Unless there are specific circumstances, sellers typically want a fast closing, usually 30 days. But if their new house won’t be ready for 60 days, acting to accommodate them goes a long way.
“As Is” Inspection Contingency
One way to make your offer more attractive, while ensuring that you have enough time to get a proper inspection done, is to have an “as is” inspection contingency. This allows the buyer find out the condition of the property while letting the seller know that the buyer will not ask for any repairs. If the inspector finds any issues in the house, the buyer will have the choice to take the home “as is” or walk.
Contingent Upon Appraisal
Once your offer is in, there is a possibility that the house may not appraise at your offer price. However, if you’ve done your homework on your offer, you could decide to waive this contingency. While you could end up on the hook for the price difference under the negotiated sales price, waiving this contingency gives an advantage over the competition in a hot market.
Ready to hit the market to buy your next house? Start by getting preapproved with one of our experienced Loan Officers today!