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How To Make An Offer that Will Be Accepted

You have finally found the house of your dreams. It is priced right and is receiving a lot of attention from other buyers. You don’t want to miss this opportunity so you are ready to put in an offer with the real estate agent immediately. What can you do to guarantee your offer is the one accepted? Financially, offers can be broken down into three categories:

1.) An All-Cash Offer

Obviously, a cash purchaser is always favored by any seller. In today’s real estate market, an all-cash offer is even more enticing. Last month, one in four real estate transactions were impacted by a low appraisal. An all-cash buyer eliminates the need for the bank appraisal.

2.) A Non-Contingency Offer

If you don’t have the cash reserves for an all-cash purchase, the next best thing would be to make a non-contingency offer. To do this you should be already pre-approved for a mortgage and have your current house already in contract. This gives the seller the confidence that you are already a qualified buyer who will be able to complete the purchase.

3.) A Contingency Offer

Some buyers start the process of looking for a new home before their current home is sold. This could be a big mistake. If you find the home you were hoping for (perfect for your family AND priced right), it will be very difficult to get your offer accepted because you are not actually qualified to buy.

Asking a seller to wait for your home to sell is somewhat unreasonable in today’s environment. One of the reasons you would want the home is because the seller priced the home at a value to sell it NOW. They want to know it is sold when they accept an offer. They normally will not even entertain a contingency offer.

Bottom Line

Unless you have the ability to purchase with cash, the best thing to do is to be pre-approved for a mortgage and have your current house already in contract before looking for the home of your dreams. That guarantees you will get the home you love at a price that makes sense.

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16 replies
  1. heather embrey
    heather embrey says:

    Sellers in Northern Virginia MAY be open to a coinciding settlement contingency – meaning the buyer’s home is under contract but they will need to proceeds of the sale of their home to buy the sellers home. This will also require the seller to agree to an assignment of their proceeds since recording of the deed most likely will happen a day after closing.

    I don’t see a lot of cash offers and when I do I encourage my buyer client to seek the advice of a financial consultant about putting all of his $ in one investment. Interest rates are at an all time low and the buyer could either buy several homes with the cash as a big down payment and watch all of the properties grow in equity instead of just one investment w/growth potential.

  2. Peter Howard
    Peter Howard says:

    1) Always, always require proof of cash funds. The buyer can furnish this to their attorney with permission to share with sellers attorney (for privacy). I have seen more cash offers recently than ever before. Make sure they got the green!

    2) No such thing any more (NY area). There is not an attorney I know that would allow their buyer client to sign a non-contingency (mortgage) contract with the lenders acting up as they are. Thats a thing of the past, at least for now.

    3) ALL offers must be accompanied with a valid pre-approval (at the very least).

  3. Terri Fredrich
    Terri Fredrich says:

    Remember that as a listing agent, if a buyer writes a non-contingent offer because they have a contract on their home, the seller needs to have continued marketing rights. Failure to include that language puts the seller at the greatest risk.

  4. Jane Foster
    Jane Foster says:

    This is fantastic advice and the most important one is getting your loan approved before you make the offer or be at least 4-5 weeks into the process. The highest stress I am seeing is when the buyers don’t do this and they take days even weeks to get the lenders the information they need. Everyone is so busy, they don’t have time to get this information in a timely manner. So each day they take, delays the escrow a day. Best to eliminate the extremely high stress this causes. Jane Foster Rancho Santa Fe CA Realtor 858-349-7614

  5. Larry Rowan
    Larry Rowan says:

    Peter’s advice is the best advice for “cash offers”. The prospective buyer may not like this, but getting confirmation, “proof of funds” and that those funds are liquid is important. I have seen requests even require some type of “hold” on those funds by the bank to insure that the funds are really available when needed for the closing. Without such confirmation, the closing rate for cash offers is noticeably lower than traditional mortgaged offers.

    Also, advise the purchaser to offer the highest possible amount of earnest money. It makes their offer look much better with no real cost to the purchaser.

  6. Marvin
    Marvin says:

    I first want to check what the seller paid for the property .
    I want to know how long the property was for sale and how many times it was listed in the past.
    I want to know the approximate age of the seller. A retiree is likely to take a lower offer than a person in their 40s with kids who is trying to upgrade.

    If they purchased in the bubble at a crazy price – They are not likely to acknowledge the current situation and you have to be ready to walk.

    I want to know the seller actully owns the property according to law – The MERS mess. I want to makes sure the sale documentation was recorded with a wet signature and can be seen at the courhose etc.

    I could go on – but you get the idea.

    When I understand all I need to know I will make an offer I think is appropriate.
    If they don’t take it – They have more of a problem than I do right now.

    Lastly my broker better be like minded or they wont be at the table.

  7. Richard
    Richard says:

    Really? I thought we were in a buyer’s market.
    A pre-approval should be more than enough to get sellers going.
    Unless you are in a real bidding situation, why would you offer anything more?

  8. T McCarey
    T McCarey says:

    Sorry but the word that came to mind as I read this was “pablum.” Don’t get me wrong, much of what appears in the KCM blog is spot on. But this article misses the mark and it’s the type of piece that makes consumers look at real estate professionals like a band of cheerleaders who gain contentment only when we gain our fee. To urge my clients to kick a contingency to the curb is tantamount to violating my fiduciary responsibility. Even if it is a cash deal I want the property appraised given the volatile and declining nature of the market. Even if my clients have been pre-approved there’s not an ice cube’s chance I would urge them to cede their mortgage contingency until we have underwriting for a specific purchase. The upshot of all this is simply pragmatic. And it is predicated on my understanding that the current market is buyer oriented. One final caveat – two recent offers that I and my clients prevailed with saw us “win” in price with letters I submitted for my clients who signed to the sellers outlining how we favored this particular unit and the basis of our negotiating stance. By the way, in one instance my clients with a mortgage beat out a cash buyer with terms, according to listing agent, roughly equivalent to ours.

  9. Anonymous Buyer
    Anonymous Buyer says:

    I am currently in the market to buy a house. My recently remodeled house is in one of the most desirable and fast-moving real estate markets in NoVa, with homes typically selling in days. The area I want to buy has homes only coming on the market rarely, and usually stay on the market for about a month. If I put my house on the market now, it would sell in a short time, meaning that we would have to wait months (perhaps up to a year) before a house that we would want to purchase is put on the market — while we are in the meantime homeless. To say that a contingency should never be considered is ridiculous. I have actually tried to put in offers on homes but was told by the seller’s real estate agent that a contingency would not be considered. In the most recent case, the house has now had two price reductions and been on the market for several months. I would think that the seller would rather have had my offer than have an empty house and two mortgages; it’s a shame the agents won’t let their clients see that contingent offers may be valuable.


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