Tips For Getting Your Real Estate Offer Accepted

With multiple offers common in Denver’s highly competitive housing market this Spring, these tips can help your offer stand out above the rest.

Pre-Approval: Sellers want assurance that you can close on your deal and they want to see a strong financial position. That means buyers who are pre-approved for their financing and submit a lender letter with their offer are looked at more favorably.

Appraisal Guarantee: Bank appraisals are based on comparable sold homes in the area of the subject property, not based on actual market activity for a given home. This can result in a home appraisal that comes in below the contract price. In this situation, the bank will only finance up to the appraisal amount. Buyers who reserve extra cash may be able to make up the difference between the contract price and the appraisal. Many sellers are interested in a buyer offering an appraisal guarantee to bring in cash in addition to what the home appraises for if contract price is higher. Before offering an appraisal guarantee check with your lender to make sure you have excess funds above what you need to get the loan. For example: You have a contract price of $400k and you are putting 20% down ($80k). If the appraisal comes in at $390k and you have offered to bring the difference of purchase price to appraised value (in this example $10k) will that affect your desired loan because you now only qualify for under 20% financing and you will most likely have to obtain mortgage insurance on your new home loan. Does that appeal to you? Maybe not…think about this before agreeing to offer an appraisal guarantee.

Post-Close Occupancy: Sellers are more frequently demanding post-close occupancy agreements in their favor so that the seller has time to find and close on their replacement home. Unfortunately in this market, sellers are getting what they demand. It’s not uncommon to see 60 day post-close occupancy requests by sellers. Buyers should be prepared for this possibility and know that a successful contract could be dependent on the buyer agreeing to such an arrangement. Be prepared and flexible on when you can move into your new home. Having money set aside to finance a short term rental while waiting to occupy your new home will alleviate the stress of waiting 30-60 days to move in. Another option is to choose a vacant home which is move in ready without waiting for a seller to move out.

Shop Below Your Max Price: Figure out what your absolute max home price is that you are comfortable with, then shop listings that are at least 5-10% below you max price. This strategy will give you wiggle room so that you can bring a strong offer over list price and get the home that you want. So if you qualify for a maximum of $400k, it would be in your best interest to look at homes listed no higher than $370-380k. Shop Cherry Creek North townhomes or Montclair homes for sale.

FHA/VA Loans: Buyers financing with an FHA or VA loan are encountering seller resistance due to appraisal condition concerns of sellers when multiple offers way above asking are being reviewed. If you are able and willing to wait 8-10 months to get into a home, a new build may be a fantastic option you might want to consider.

Back-Up Offer: Many times houses will go under contract and come back on the market within a week or two. If your bid was one of the higher offers but just missed out on being selected then offering to have your contract in back-up position is a great option. Many buyers get their offers accepted and then they have a change of heart about the reality of owning a home or finding items during inspection that they don’t want to fix. This can result in a buyer terminating their accepted offer. If your offer is in back-up to that contract your offer is now moved into 1st place and you have the opportunity to do your own due diligence on this property.

Don’t Lose Your Mind: This swift market means that many buyers are losing out on properties because they aren’t coming in with strong enough offers. Knowing your budget and sticking to it is the key to finding a property that fits your needs.

For more tips and guidance on buying your next home…. Call Jennifer Pollock Today: 720-495-9404. Looking for advice on selling your Mayfair Denver Colorado home? Jennifer can help with that too.

 © 2017 Jennifer Pollock, Broker/Associate Keller Williams Downtown, Denver, CO, Lic. Colorado