Use these Realtor tips for how to write an offer on a house that gets accepted in a competitive real estate market.
One concern that came up on one of my recent mastermind sessions via Zoom is how to write an offer on a house right now. We are experiencing a very competitive market right now, so let’s discuss some strategies that will help your offers get accepted.
VIDEO: How to Write an Offer on a House that Gets Accepted in a Competitive Real Estate Market
When the Covid-19 crisis hit, a lot of people said that we were going to experience a crash in the real estate market. I was one of the few that said, oh no, quite the contrary. This is all about supply and demand! Housing prices are going to go up and demand is going to go up as supply continues to go down.
As you can see from this infographic, the housing supply year-over-year is going down. In April, you see the effects of Covid-19 hitting the housing supply numbers. Once more and more people in the real estate industry began to see this happen, they changed their tune.
When housing supply is low
If the housing supply is low, this is a key indicator of the strength of the current housing market. It tells you that prices are going to go up, which means sales volume is going to go up. There is a lot of money to be made in selling houses for the foreseeable future. The bad news comes when trying to find a house for our buyers right now.
How to write an offer on a house right now
Because this is a competitive market with a low supply of houses, it is important to consider how to write an offer on a house. What can you do to write offers to ensure that they will be accepted right now? Here are 8 tips.
1. Increased deposit on offer
This tactic shows the seller that your buyer is serious and that you are investing more money up front. This provides more security that the seller won’t have to worry so much that things could come up and cause the sale to fall through.
2. Find ways to take some of the financial burden off the seller
Just to give you a few ideas, you could have the loan contingency or appraisal contingency removed at the onset of the offer. This will help button things up faster for the seller. Or, you could offer to take the home warranty off of the seller’s plate. As the buyer’s agent, you can offer to provide them with this yourself. All of these items sweeten the deal for the seller because you are taking items off of their list of things they would normally need to pay for.
3. Remove inspection contingencies
If you have the ability to have the inspection done on the day you write the offer, you can effectively remove the inspection contingencies right then and there. There are several ways to do this and I talk about it in more detail in the video above. One way is to ask a friend who is knowledgeable or in the industry to inspect when you go to see the house. They come with you! And that’s a great way to get a heads up on whether or not your buyer wants to make an offer in the first place.
4. Make an offer contingent upon viewing
In some cases, houses are selling before you can even get your buyers in the door! One idea would be to make an offer contingent upon viewing. That shows the seller that your buyer is serious. It gives them motivation to let you at least have a fighting chance. Remind the listing agent that it could benefit them to get multiple offers!
5. Include a “love letter”
A good love letter from your buyer could make a huge difference. When you’re thinking about how to write an offer on a house that stands out from other offers, a love letter is huge! In this letter, your buyer expresses how much they love the house. This letter is given to the seller and can really pull at the heartstrings.
6. Find the extra money
This one is tough, especially for folks at a lower price point. But you must educate your buyer that if push comes to shove, they may need to reach out to a friend or family member and ask for a loan. In this competitive market, you will need to make a competitive offer, and it’s important to be realistic about it.
7. Escalation clause
Within the offer, you can write an escalation clause that details how much cash above the best offer and above appraisal your client is willing to pay. It depends who your buyer is and what position they are in. Not all buyers will be able to do this. That said, sometimes it will help! So, for example, in the escalation clause you would have detailed that the buyer is willing to pay $2,000 over whatever the best offer is.
8. Work with the listing agent
Reach out and ask, what can I do to get my client’s offer accepted? Sometimes it’s difficult to get in touch with the listing agent. Ask them what they need the offer to include. This also plays a hand in getting the listing agent on your side to some extent. If the listing agent details all of these requirements for your offer to be accepted and then something comes up or a better offer comes in, they are going to feel guilty. They will likely reach out to you to let you know, and they will feel some connection to you. Most agents in this situation will give you another stab at it because they already have this relationship with you.
How to write an offer on a house
This brainstorm session on how to write an offer on a house was very productive, and I hope you watch the entire video above. You’ll come away with some great ideas that will help you help your buyers in this competitive market! Good luck!