Spring and Summer have always been considered “selling season” in Carlsbad. And even though so many things were different this year, the demand for homes through the warmer months is as strong as it’s ever been. But this year, with little for sale and historically low interest rates, many homebuyers are finding the competitive environment challenging. With multiple buyers competing for properties, even getting a terrific offer accepted is challenging.
Fortunately, there are some things you can do to make your offer more attractive to the sellers and increase the chances of getting your offer accepted.
- Have Full Pre-Approval- A step beyond pre-qualification, a pre-approval involves submitting your full application to underwriting. Your lender will collect all your financial data and submit for review. This is stronger than a pre-qualification; a pre-approval requires the buyer to provide proof of their ability to qualify for the loan.
- Increase the Earnest Money- Earnest money is the deposit held in escrow. While the contract will dictate how monies are disbursed in the event of a cancellation, increasing the amount offered can show the seller you’re serious.
- Add an Escalation Clause- In a bidding war, it can be difficult to know what to offer because you want to outbid the competition without going too high. An escalation clause is one way to automatically outbid the others. The clause typically offers an amount—$1,000 for example—higher than any verifiable offer up to a specific amount. This can ensure yours is the highest offer.
- Pay any Appraisal Shortage- When offering more than asking price, sellers become concerned about the appraisal coming in too low. If you are willing to pay over market value, include the amount of shortage you are willing to pay.
- Remove Inspection Contingency- This option can be tricky, but if you are planning a large remodel or are willing to tackle any defects found, then you can make your offer stronger by accepting the home as-is.
In this fast-moving, competitive real estate market, it’s important to stand out from the crowd, and increase the chances of having your offer accepted. These strategies are great ways to demonstrate to the sellers that you’re serious about buying their home, increasing the chance of having your offer accepted.