If you have your heart set on a great home in a perfect neighborhood, there’s a good chance other people are interested in the property as well. When trying to purchase a home, the amount you offer needs to be competitive without breaking your budget. These tips will help you bid on a home so you can get your offer accepted.
Connect with the Homeowner
When it comes to standing out as a prospective buyer, money isn’t necessarily the only thing a seller considers when accepting an offer. Connecting with the seller will also play a role, especially if your offer turns out to be similar to another potential buyer.
Reach out to the homeowner and tell them what exactly it is that you like about the house and why it would be perfect for you or your family. A personal letter may be just enough to stand out from others and get their attention.
Prove You Can Afford It
When making an offer on a house, make sure you can afford it by getting a pre-approval for a mortgage. By doing this, you show the buyer that you are serious about purchasing the home and that you have the financial means to do so. A pre-approval also saves time if your offer is accepted by shortening the closing period, which benefits both you and the seller.
Use an Escalation Clause to Get Your Offer Accepted
An escalation clause is written into your purchase contract and will automatically increase your offer (up to a certain amount). If you are outbid, this clause offers more for the property without having to write up a new contract.
There is a downside to this, however, in that the homeowner will see how much you are willing to pay and you might spend more than the home is worth. Talk to your real estate agent and ask for their advice when considering an escalation clause.
Offer a Larger Down Payment
Your biggest competition when buying a home is another potential buyer who can make a cash purchase. This may not be within your financial means and it might seem like your offer is the unlikely choice. By offering a generous down payment, you are showing that you are financially prepared to purchase the property. This will increase the chances of having your offer accepted.
Get Your Offer Accepted by Increasing the Earnest Money
Earnest money is an amount of money paid to the seller when making an offer. It is a kind of deposit and is usually between 1% to 3% of the purchase price. If it’s possible for you to do, paying a higher amount in earnest money shows the homeowner that you are serious about purchasing the home.
Using the right strategies will help increase the chances of getting your offer accepted. Make sure your bid stands out and that the homeowner knows that you are serious about the purchase.