Will your offer be the chosen one?
Many buyers are hearing about the dramatic drop in prices and have the misconception that they can jump into the market, make a lowball offer and get an acceptance right away. The reality of what we are seeing in today’s market in Placer County is far from that. Although it may look like there is a lot of inventory out there, the number of available “quick close” homes are relatively low. That being said, we are now again seeing multiple offers on good homes. If you are serious about writing an offer that has a chance of being accepted and that shines above the rest, there are some tips that you may want to consider.
Get preapproved-You must have a lender preapproval letter ready to submit with your offer. Get preapproved in advance and keep an updated letter on file. Sometimes on bank-owned properties you will be required to get preapproved by the lender who owns the property. Your agent can help facilitate this but be prepared to make this happen. Time is of the essence and can mean the difference between getting the home or not.
Get property history-Ask your agent to give you the history on the property. Finding out how long the property has been on the market and if there have been any price reductions can help in your offering price strategy.
Know the “Comps”-Your agent should be able to give you a list of comparable sales and current listings in the neighborhood. The comparables should be similar in age, square footage and appointments. Most sellers and sellers’ agents know what other properties have sold for and usually expect to see a similar offer. Some sellers price substantially under market as a strategy to create a bidding war. If you know the property is worth $50,000 over asking and submit that type of offer from the start, you may get lucky and be a new homeowner in 30 days. Your agent should know your target area and have a good knowledge of the comparables. Rely on your agent for good information in this matter.
How many offers are there?-Have your agent ask if there are multiple offers. If there are more than a few, you can probably guess that you will have to pay list price or above. If there aren’t any offers and the house has been on the market for more than a couple weeks, you should be able to go in with a lower offer.
Financing-Cash offers will always stand out and can usually get the property a little lower than an offer with a loan. If you know you are up against cash buyers, you may want to raise your price. Also, sellers will look more favorably on certain types of loans. Talk to your agent and loan officer about how the seller will view different loan programs.
Other terms-The sellers don’t only look at price. There are other terms that can make your offer stand out. Who is to pay title and escrow fees? Will there be inspections? Will the buyer ask for repairs? How much is the earnest money deposit? Consider shortening your inspection contingency period as another strategy to make your offer look better. Work with your agent and realize that there is more to an offer than price.
Knowledge is power-Find out as much as you can about the property you are interested in. In this market you may have to make a quick decision and you will need to rely on your agent to ask lots of questions to help figure out what the sellers’ hot buttons are. Don’t feel shy about talking to the neighbors or making some calls yourself. It can be interesting what you will find out and this could turn into getting your offer accepted above the rest.
Have fun with the process but take it seriously and choose an agent that you trust to get the job done right. Choose someone with the right mix of knowledge of the area, someone who is aggressive but not pushy, knowledgeable but not arrogant and someone that is truly looking out for you.
Will your offer be the chosen one?