Tips for getting the seller to accept YOUR offer!
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It's a highly competitive market in the real estate world right now. Many would-be borrowers lose out on getting into contract on their dream home because sellers are tasked with choosing from multiple offers that were submitted. Perhaps you have found yourself in a bidding war, or a lost offer because you were financing through FHA or VA? Even Conventional offers are getting turned down because some buyers are CASH buyers.
And what seller would not choose a cash offer over a financed one? Cash offers are easier to process, move faster and give sellers peace of mind. Even realtors and title companies prefer cash offers.
I have some tips to help you get the sellers to agree to your offer and get into contract:
1. If you can make a cash offer, do it! I probably lost about half of you with that statement. However, let's talk about ways you can make a cash offer. For starters, if you own your current home or have a lot of equity in it, you can take out a HELOC. HELOC's can typically close within a couple of weeks, some as quick as 5 days. Once your purchase your new home, you sell your other home and recoup your money. You could also liquidate retirement funds or investment funds and have them on hand to purchase a home. That's step 1. Step 2 for either of these options is to use something called Delayed Financing. This is where you use the cash you have upfront and finance the solution after closing. In the case of a rental property purchase, it could be a DSCR (debt service coverage ratio) cash out refi loan. If it was for a primary residence purchase, a bank statement or full document refinance loan can be used to replenish most of the funds that were used.
2. If you are financing the purchase, have your lender issue a guaranteed pre-approval letter. This is a little different than just a pre-qualification or typical pre-approval. Let me explain those first. Prequalifications are only credit pulls without any verification of income or stated facts on the application. Pre-approvals are credit pulls, verification of income/assets AND an approve/eligible result when the loan scenario is put through the automated underwriting system. A guaranteed pre-approval goes one step further than this by sending the file to an actual underwriter to review everything. These loans have a higher percentage of closings because they have been thoroughly reviewed upfront. See the flyer below for a bit more info on Delayed Financing.
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3. Go conventional and put down a larger earnest money deposit and a larger down payment. This will show the sellers you are a serious buyer with the credit score and funds to back up your purchase. Buyers that are able to put down more funds are generally financially stable and less likely to have problems with financing.
4. Offer a quicker close and/or a short option period. Very rarely does a seller want a long, drawn-out closing. Occasionally, a seller may want to stay in the house a bit longer, but that is usually the exception. By offering a quicker closing (you will need a speedy lender to accomplish this) and a short option period, you are expediting the process, and that may be exactly what the seller needs.
I hope these tips help you get into a contract for your next home!
If you are a real estate agent and have clients in need of getting a guaranteed pre-approval, set up a call with me here:
If you want more information on getting a guaranteed pre-approval, set up a call with me here:
If you want more information on delayed financing, set up a call with me here:
If you want an equity line of credit review (HELOC), set up a call with me here:
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