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This Old House - Do-it-Yourself

3 Ways to Make Your Bid Stand Out

Written by Posted On Wednesday, 29 March 2017 21:53

Buying a house is a stressful experience. So much rides on whether the seller accepts your offer. When other buyers are interested in a home, it is important to sweeten the offer to make it more attractive to a seller. There are three very effective ways to do this.

Write a Letter

Homeowners are often emotionally attached to their homes. They have raised their children and lived many ups and downs while residing there. A letter is an emotional appeal to the home-owner and it can be very effective when negotiating. writer, Sam DeBord, recommends that you should start a letter by complementing the owner. Tell the owner reasons why you love the house and how you would love to raise your own family there.

Be personal, but don’t over disclose your future plans. Informing the homeowner of changes you plan to make is a bad idea. Instead, focus on the reasons you love the home and why you want to live purchase it. Tell the homeowner if you grew up in the area, or any other connections that they may relate to.

Finally, promise that you will love and care for the home. This was their baby. They want to make sure that it will be in good hands when they move on.

Get Pre-Approved for a Mortgage

Homeowners want reassurance that a sell will go through. There is nothing more disheartening than when you are selling your home and the sale falls through because the buyer couldn’t get approved for the mortgage. If you are pre-approved, the seller will be much more likely to accept your offer, even if it is not the highest one.

Think about this from the homeowner’s perspective. There are many reasons why a person would sell their home. They may have purchased another home, need to relocate, or they may be consolidating homes after marriage. The point is, when a home is for sale by owner, they want out fast.

The longer a seller stays in the home, the more it will cost them. Accepting an offer with a pre-approved mortgage is like a guarantee to a seller and it will seem less risky. They want the sell and closing process to move along as quickly as possible and a pre-approval can make that happen.

Include an Escalation Clause

If you are looking at purchasing a popular property, you will have to make a better offer than your competition. A way to do this, without overpaying, is by including an escalation clause in your offer.

An escalation clause allows you to offer an increase of a specific amount over the highest offer, up to a maximum offer. If you put in an offer for $200,000 and another offer goes in for $210,000, you can offer an additional $2,000 over that offer, up to $225,000. A sale isn’t always about money, but when that is what a seller is most interested in, they will go for the highest bid.

This clause is beneficial for the buyer, as it requires the seller to provide proof of a higher offer so they can’t scam the buyer by falsifying offers.

There is a word of caution here; Don’t go over the appraised value of the property! Bankrate stresses that this creates a host of other issues. If your offer is over the appraisal value, you may not be able to obtain financing.

Be reasonable and don't become emotionally involved when including an escalation clause with your offer. There is nothing worse than making a high offer and not being able to follow through on the purchase. This wastes the sellers and buyers time and creates unnecessary stress for both parties.

These methods will significantly increase the chances of having your offer accepted. When you plan to purchase a home, these are excellent ways to make your offer stand out.

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Sofia Belnap

Sophia is passionate about writing in the real estate and home improvement spaces. When Sophia is not writing she loves reading, cooking, and spending time with friends and family.

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