Across the country, the real estate market is favoring sellers in most areas. Many homebuyers are becoming frustrated by being outbid or having sellers accept other offers. Here are 6 effective tips for making an attractive offer when buying a house.
If Possible, Make a Cash Offer When Buying a House
A cash offer is always most appealing to the seller because it speeds up the closing time and eliminates the risk of financing falling through. As a buyer, you can waive the appraisal since you will not need one to secure the funds from a lender.
If you make a cash offer, you will need to provide proof that you have the money, like a bank statement. When a seller sees this proof, they are reassured that you can afford the home and there won’t be any hold-ups in acquiring funds. Typically, sellers prefer cash offers over those that are dependent on a financial institution.
Large Downpayment
If you aren’t in a position to make a cash offer, the next best thing is offering a large cash downpayment. A 20% downpayment is considered standard, so you’ll gain an advantage over other buyers if you can offer a higher amount upfront.
Appraisal Gap Clause
One common way for a real estate transaction to fall apart is when the house appraises for lower than the asking price. In this case, the lender will not provide the full amount. If the buyer doesn’t have the cash to fill the gap, the deal falls through.
If you are financially secure with extra savings on hand, waive the appraisal gap clause. The appraisal gap clause is commonly written into offers so that the buyer can get out of the deal if the home doesn’t appraise. By omitting this clause from the offer, the seller will know that you aren’t relying on only the mortgage loan.
Up the Earnest Money
Earnest money is a deposit you make when placing an offer. You won’t get this money back if the deal falls through. You may have home inspection and appraisal clauses written into your offer, but the seller will keep the earnest money no matter what. Earnest money is typically 1-2% of the sales price, so if you can offer more, it might sway the seller to choose you.
Use an Experienced Realtor
An experienced Realtor has written hundreds of offers for many different situations. By hiring an agent with years of experience, you’ll have access to expert advice on how to make an offer that will get accepted.
A Simple Offer When Buying a House
An offer should be straightforward and easy to understand. A good Realtor will understand this and compose a clean and simple offer that shows that they are easy to work with.
American Dream Home Inspections provides home inspection services to New Jersey. Contact us to schedule an appointment for our services.