1. Pay cash.
Investors have been snapping up homes to flip or rent, and they usually come to
the table with cash. Sellers love all-cash offers because they’re less likely
to fall through before the sale closes. In January, all-cash transactions
accounted for 28% of existing home sales, according to the National Association
of Realtors. If you need a
mortgage, a low appraisal could cause your bank to back out of the deal,
forcing the sellers to put the house back on the market.
2. Get
pre approved. If you can’t pay cash, you’ll need to get a mortgage. Three or
four months before you shop for a home, check your credit reports, says Michael
Corbett, a consultant to real estate Web site Trulia and author of Before You
Buy! That will give you time to dispute any errors and take short-term steps,
such as paying off debts, that will improve your credit score. You can get your
reports once a year free from the three major credit bureaus at
www.annualcreditreport.com. Then get a bank’s pre-approval. It won’t guarantee
that you’ll get a loan, but it will show sellers that a lender has verified
your income and credit score and determined that you can afford payments on a
mortgage for a certain amount.
3. Make your
best offer on price. You may only have one shot to get it right, so make your
best offer—what you’re willing and able to pay. Base your offer on recent sale
prices of comparable properties in the neighborhood so that it will pass
muster when the property is appraised. If you hold back, thinking you’ll
sweeten the offer on the second try, you may lose the property to another
buyer.
4. Up the
ante. You can add an escalator clause, with which you agree to ratchet up your
offer if there’s a higher bid from another buyer. Keep in mind that if you
agree to pay more than the market value determined by an appraisal, you’re on
the hook for the difference from your own funds.
5. Beef up
your earnest money. This deposit signals how serious a buyer you are. Try
doubling the amount that the seller requests or that is customary in the area.
If you must renege on the offer for any reason allowed by the contract or state
law, you’ll get your money back.
6. Pay for
extras yourself. These might include some of the closing costs, homeowners
association dues that must be prepaid, a one-time contribution to a
community-enhancement fund, or a home warranty.
7. Make
contingencies palatable. Most sellers prefer offers with no contingencies, but
you probably can’t afford to forgo the protection that contingencies provide if
you want to cancel the contract. Offset a financing contingency with
pre approval and a strong earnest money deposit. If you have enough cash, temper
an appraisal contingency by assuring sellers that if the appraisal comes in
lower than the purchase price, you’ll pay the difference or split it with them
(up to a certain amount). Include a home-inspection contingency, but tell
sellers that you will cover the cost of any repairs. If the price tag on those
repairs gets out of hand, you can back out of the deal.
8. Write a
love letter to the sellers. This will help you connect with the sellers, especially if you haven’t met
them. She suggests such points as: “We’re relocating from…” “We see ourselves
living in your neighborhood or chose your schools because…” “We especially
love…” and “We appreciate your accommodating our visits.”
9. Give the
gift of time. Express your willingness to work with the sellers’ timetable to
go to closing. If the sellers want to remain in the home for a while after
closing, offer them a “lease back” or “rent back,” which means that you will be
their temporary landlord. This is a legal arrangement, and you’ll need to work
out the details with your agents and be sure that the sellers keep their
homeowners insurance during their stay. If you are bidding on a short sale,
make clear to the sellers that you are patient and can wait for the bank’s
decision.
Terry Naber,
RE/MAX Properties, Inc, is an experienced real estate professional since 1990
having served hundreds of clients and helping them in the process and dream of
home ownership. Terry KNOWS the market
in the Colorado Springs, CO. region.
Give her a call to discuss your plans to sell and list your home, gather
information, and find out what Terry can do to get you the best market price
with the least time on the market! Call
719-590-4796.
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(article reprinted; Inman news)
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