Tip Tuesday: How to Craft and Recognize a Strong Offer

Are you selling or buying?  Is it hard to understand what factors make a deal strong?  

Let us help you with these 5 tips!

1. Finances: Every offer should be accompanied by a pre-approval letter from a mortgage lender or a proof of funds for cash offers.  If you’re selling, ask your agent if they know anything about the buyer’s lending company.  Is it efficient?  Does it tend to close on time?  As a buyer, ask your agent for recommendations to a lender because they know those that are easy to work with and great at their job so that you can get into your dream home with no issues!
2. Deposits: Offer a strong upfront deposit.  Our general rule is $1,000 per every $100,000 (i.e. a $250,000 would mean a $2,500 deposit), but to make the offer stronger, make that initial deposit larger.  Also, offer a 2nd deposit. Upon presenting a contract you put forth a deposit to secure the home.  Consider putting forth a 2nd deposit in another 7, 10 or 14 days.As a seller, its important to know that this is the buyers way of showing that they are serious enough about the home and confident in their ability to purchase that they’re willing to put forth more money up front.  As a buyer, this is a great offer but only do it if you’re truly confident in your ability and intent to purchase the home.  For example, if you could possibly get transferred for a job and end up getting transferred much further than you’d really like to drive from your home and no longer want this home, its now a breach of contract and you won’t get your deposit make.  Make sure everything is secure!
3. Remove or Modify Any and All Contingencies: If possible, remove any contingencies such as needing to sell a home first.  Also, modify other contingencies such as inspection.  The average time line for getting an inspection is 14 days from date of contract.  Reduce that to 10. If your offer is contingent on the seller paying closing costs, see if you can remove that.  Contingencies mean risk to a seller so lowering or removing them means lowering or removing risk and thus, making your offer more secure than the one next to it.
4. Be Responsive: As both a seller and buyer, its important to respond quickly to each other.  (This is an important factor when choosing a Realtor: how quick are they at responding?!)  Working with each other’s timelines only proves to be someone that’s easy to work with and thus, an attractive business deal.
5. Be Aggressive: With low-inventory, well-priced, good condition homes will go fast.  As a seller, price your home according to the current market.  And as a buyer, be quick about making your offers.  This includes any resources your agent may have.  Do they have electronic signatures if you want to write up an offer later at night and submit it before anyone else does in the morning?  Are they able to see homes quickly?  Don’t sit on a home.  Even if you have slight interest, go see it before its gone! As a seller, be sure to make your home available.  Being too restrictive in when potential buyers can see a home is an immediate frustration and turn-off.  Finally, as a buyer present your best offer if the home is new to the market.  You can’t guarantee that a seller will counter or ask for a “highest and best” round.  More and more, we’re seeing sellers

Whether you’re a buyer or seller, it’s important to create a strategy and know off-the-bat what you’re willing to offer/accept and negotiate/not negotiate on.  Find partners that you really feel comfortable with and who you can trust in the process.  This includes your Realtor, Mortgage Lender and Attorney.  As always, Harrison Realty Team is here to give you the service you deserve from a team you can trust.

Photo Credit: www.forbes.com