A Smart Offer: Winning Strategies
It gets frustrating when Sellers don’t accept your offers! You want to know how to write a competitive offer that has a better chance of getting accepted, whether you have newly decided to look for a new home or have been looking for what seems like forever.
You are in the right place
The Glenn Allen Real Estate Team is excited to share some ideas and strategies that have been compiled over the 33+ years that we have been helping people buy and sell homes.
Our approach when coaching our clients is to do the best we can for each negotiation, not be attached to the outcome and staying positive. We want to make the entire house hunting experience a pleasant experience. We will eventually get you the home that works for you and your family, promise!
Let’s Dive In
There are a lot of moving parts when preparing an offer on a house. It’s our job to get a good view of the topography and a lay of the land on each individual home. Every negotiation is unique so we start off with gathering as much information as we can to build the best strategy to share with you.
Who is the audience and who are we trying to impress?
First are the Sellers and in a close second is the Sellers Agent. Knowing as much as possible about The Seller and their Agent will allow us to figure out what is important to them. This is key. But how to we find this out? Well, we simply call the Agent. Agents want the best for their clients, and they want Buyers to know what’s important to them!
What is typically important to the Seller and their Agent?
- Good offer price, not necessarily the highest offer
- A Solid Buyer
- A Solid Buyers Agent on the other side of the transaction
- To feel confident the deal will actually close
- …. Terms, terms, terms, and TERMS.
Terms, Terms, Terms, TERMS!
The most significant terms we are Focusing on: Offer Price, Contingencies, Close of Escrow and Occupancy. There are others, however these are typically what the Sellers and Sellers Agents will look at first.
In the Sellers’ world, what are their ideal terms?
- All Cash offer
- NO contingencies
- Quick close of escrow
- Free rentback if they live in the property.
Believe it or not here in the Bay Area we see those terms often, especially since the pandemic. However, sometimes based on what we know about the property and what your financing capabilities are, we just can’t offer these ideal terms. That’s when we build a smart approach to your offer and do the BEST we can.
Our goal is to position our Buyers’ offer to look as close to the “ideal” offer and impress the Seller such that they select you to buy their home while keeping a Buyers’ best interest on top of mind.
Show Me the Money
Are you an All-Cash Buyer or, like most Buyers, Financing the purchase?
If you are paying cash, it’s simple, just provide proof of funds in the form of statements or a letter from your financial institution and we are Done!
If you require a loan, then we want to make you look and feel as close to cash as we can. The Lender you choose to work with is really important…really! You will need to get you pre-approved with a complete loan package with your Lender. This will allow your Lender to quickly close in 18-21 days. Your Pre-Approval will also become a part of our highlight points in our conversation with the Seller’s Agent. Just like a cash offer, if we you have all your ducks in row, we can offer a NO FINANCING CONTINGENCY! This is ideal and a step in the right direction in feeling and looking like a cash offer!
Appraisal Contingency
When it comes to major contingencies, the Appraisal Contingency is high on the list. When an Appraisal contingency is needed per your Lender, how do we minimize the Sellers’ perception of a potential problem? One way is to have a stop gap where the Buyer makes up a portion of the difference between the purchase price and the appraisal price if the appraisal comes in lower than the purchase price. Another issue is timing of the appraisal continency. This can be managed depending on what Lender you have chosen. In the end, we craft the best terms for the Seller benefit and balance the aggressive terms with the potential risk. You know, that ol’ risk/reward analysis.
Speaking of risk, managing your risk a critical aspect of your Agent. Your Agents job is to highlight potential risks so you can make the most informed decision. We often say, ‘there are a lot of potholes.’ It’s our job the help you avoid the potholes and navigate this real estate market to get you what you want. Your Dream Home!
Inspection Contingency
The Inspection, or ‘Investigation,’ Contingency is another term that is focused on by the Seller and their Agent. Whether or not the Seller has provided inspection reports, we will come up with a strategy that allows the Seller ‘feel’ confident and give you the necessary insights into exactly what you are buying. First, we make the contingency as short as possible. If some inspections have been provided, we can limit the additional inspection contingencies to only the areas of concern! We balance to shorten the timeframes while making sure you, the Buyer, have a good understanding what they are buying. It is so important that we avoid any costly surprises. Often, we will shorten the time frames by pre-ordering inspections and submit the schedule to the Sellers’ Agent with the offer. This way they know we can get them done quickly. If there’s problems with the house that are disclosed in inspection reports, we will have a conversation Sellers Agent asking additional questions while assuring them we understand the issues and the Buyers’ have signed off on them.
What the Seller is concerned about is the Buyers backing out and/or coming back to renegotiate the price based on what was disclosed upfront or even what may be discovered during the inspections. We address that substantial concern of the Seller with the Buyers.
What about Pricing?
To be successful in getting your offer accepted and in house of your dreams, we need to be in the top tier of the prices being offered. How do we come up with the price? We start off by doing a detailed market analysis that we discuss with you and determine what we think the current market value is based on the recent sales. Depending on the amount of activity and interest in the sought-after home, we determine what we believe the “selling price” may be. This is a bit of a rubber yard stick. We also forecast what the Seller may do if they receive multiple offers. To figure that out we will call the Sellers Agent asking what strategies they typically recommend to a Seller in a multiple bid situation. Based on what the Sellers Agent strategies and the amount of activity the Agent says they are getting on the home, we come up with a pricing strategy. Our goal is to get the home and not leave much money on the table. To be in consideration you do should be the top price or remarkably close behind.
Occupancy and Close of Escrow
In our conversations with the Sellers Agent, we determine what the Sellers’ expectations, needs, and wants are on when they want to move out if they live in the house. Some Sellers may need additional time in finding their own Dream Home.
Cloe of Escrow length is based on when the Seller wants to move out and what the Buyer and their Lender can do to close the loan.
Every situation is unique! Our job as your Agent is to get you the necessary information in order for you to make an informed decision…we coach you to help you get you what you want!
Now let’s get this plan into action! Let’s set up a time to discuss your personal situation, your goals and how we can help you get what you want…you next home.
