Work with your real estate agent to understand the local housing market and make a winning offer while still remaining within your price range!

After weeks of searching, you’ve finally found your dream home- congrats! You’re financially ready to take the next step in homebuying. But when searching for a home, especially in a seller’s market, one thing stands between you and your dream house: other homebuyers. As such, while you may have found the ideal house, you need to make an offer that’ll be accepted. Keep in mind that every situation is unique, so you might need to tailor your offer to fit specific scenarios. Nonetheless, here are a few tips on making a winning offer on a home!

Key Takeaways: 

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  Knowing how to make a winning offer for a home matters, especially in a hot market

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  You might need to be flexible to get your home offer accepted.

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  A loan preapproval and going easy on contingencies could help sway the seller your way.

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  A skilled real estate agent will help you understand the local housing market, come up with a fair offer price, and guide you on what to include to submit a winning offer on a home. 

Get Preapproved for a Mortgage

The homebuying process shouldn’t start by searching home listings; it should start with a mortgage preapproval from a lender. A preapproval letter achieves two things:

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   Verifies your price range so you know what homes you can actually afford

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   Shows sellers and their agents that you’re serious about the purchase and won’t fall through

Sellers typically give preference to preapproved homebuyers. That’s because preapproval shows them that when it’s time to close, you’ll have the money.

Note that preapproval is different from prequalification. Prequalification is merely the lender estimating how much you can borrow- it’s not committing to giving you a mortgage. On the other hand, preapproval confirms that you can borrow X amount based on the lender’s evaluation of your assets, income, and credit score. And when the seller accepts your offer and you sign the homebuying agreement, the preapproval gives you a head start on your mortgage application. So, although preapproval takes a little longer and requires an application, it's a worthwhile investment, particularly in a competitive market. 

Figure Out a Fair Price

Your real estate agent can help you conduct a comparative market analysis to determine the fair market value of the house you’re considering. Moreover, if you or your agent search real estate listings and public records, you might unearth valuable “intel” about the home seller's motivations to sell. That could help you create a winning offer for less money. For instance, you may learn that the seller is moving for a new job and needs a fast closing- faster than other buyers are willing to accept. Or maybe, you could learn that the seller hasn’t found a new home and might want to delay closing. Armed with this intel, you can create a more tempting offer than other homebuyers for the same sale price (or less). 

 Go Easy on the Contingencies

Contingencies are clauses in a homebuying contract that allow you to walk away from the deal without legal liability. Many home offers include a few standard contingencies, such as a home inspection contingency and financing contingency. The contract should also include an appraisal contingency- if the home appraisal value is lower than the selling price, the lender can’t move forward with your loan. Your real estate agent can walk you through the types of contingencies to include in your home offer. However, as a rule, contingencies are obstacles to successful home closings, so keep them to a minimum. 

Essential Note: Whatever you do, don’t waive the home inspection contingency. That’s because if you do and later the inspection reveals a major issue with the house, you may lose your earnest money deposit if you walk away from the deal. 

Write a Personal Letter

Many sellers want to pass their homes onto a buyer who’ll love it as much as they did. So, you can increase your chances of winning a bidding way by including a personal letter to the seller. That’ll cost you nothing but will leave a lasting impression on the seller. Here are a few tips for writing an excellent personal letter:

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  Include a few details about yourself: Give the seller an idea of who you are as a person. Introduce yourself and your family. That makes your offer more personal than simply a set of numbers.

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  Write about the house details you love: Were you touched by the initials etched into the walkway? Did you fall in love with the shape of the pool? Are you already imagining yourself serving dinner in the large dining room? Let the seller know exactly why you want to buy their house. 

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  Explain your offer if it’s low: Use the letter to explain why you‘re submitting an offer that’s below the seller’s asking price. That way, the seller knows you aren’t simply attempting to lowball them. 

Ensure Your Agent is a Strong Advocate

Is your agent truly representing your interests? Ask and get the details of the relationship in writing when enlisting a real estate agent. In some instances, an agent could work with both the buyer and the seller and not have a fiduciary responsibility to either. And if you use a seller’s agent, their duty is to promote the seller’s interests- getting the highest price and best terms for the seller. To negotiate effectively and protect your interests, you’ll want a real estate agent who’s solely in your corner. Ideally, your buyer’s agent should be your biggest advocate and master negotiator. They’ll guide you on what to include to ensure you submit a winning offer on your dream house. Keep in mind that how a seller is treated and how you’re represented by your agent can often make or break the deal. 

Ready to Buy a House? Consult the Experts!

If you’re ready to buy a house, it’s highly recommended that you work with our knowledgeable real estate agent who’ll guide you through the homebuying process. With our help, you can make an informed decision and submit a winning offer on your dream home. For more information about winning offers and the overall homebuying process, contact our real estate pros today!