Across the nation, buyers are dealing with record low inventory issues that started in 2020. The pandemic opened a whole new realm of issues in real estate world and caused major shortages with labor, supply chain for new construction, and government shutdowns lead to extreme delays in adding new inventory construction to an already restricted market. This lead to our current scenario, where we have lots and lots of buyers and just not that many sellers. With those different factors in effect multiple offer situations are more common than ever before across all markets in the US.
I get calls on a daily basis from frustrated home searchers that have offered above asking price for homes but still cannot seem to win that bidding war. Well, don't give up my friends. Don't throw in the towel just yet. Here are some ideas that will get your offer accepted or at least a counter from the seller:
1. No Home Sale Contingency - Including a prior home sale contingency creates additional risk for the seller. Including a home sale contingency means the seller is taking the home off the market for 30 days (give or take) and if that deal falls through, they lose a lot of momentum with the listing of their home. Even with me providing the agent with the comps and market info for your neighborhood, this doesn't give them really any information of whether your home will sell quickly or not. The listing agent will not do the research, or really even entertain it, when they have numerous offers that don't include this contingency. If you know your home will sell quickly (which in this market is likely), I recommend you sell or at least be under contract before you purchase something new. Remember, the offer with the least contingencies...or, none at all, will give you the best chance.
2. Waiving (or significantly reducing) Due Diligence - Instead of asking for Due Dilligence, you can waive that right but still request the right to inspect a property. If you really want the house, add a stipulation that says "we won't ask for any repairs less than (ex. $2,000)", you will be willing to pay for the cost of getting repairs done up to a certain amount. Due Dilligence gives the buyer the right to back out of a purchase for any reason whatsoever. Right to inspect only gives the buyer the right to back out if the buyer and seller don't agree to the repair and resitutation of material defects in the home after inspection has occured. As you can imagine, one gives the seller quite a bit more confidence than the other.
3. Offering more Earnest Money - In a normal Atlanta market, 1% is normally acceptable as an earnest money amount. Today, buyers are offering anywhere from 2-5% or more earnest money. I have seen earnest money deposits over 6 figures on homes under 7 figures just to show how serious the buyer is about moving forward with the purchase!
4. Option money - Putting cash upfront, include it as part of the purchase price. If you back out for any reason, then the seller can keep the money. Once you close, this money will go towards the purchase price. This is additional enforcement to your seller you are extremely serious about moving forward with the purchase of this property.
5. Get through underwriting / Waived financing contingency- If you decide to or need to use financing to purchase your home, talk to your lender and get through underwriting upfront. This will show the seller that you can definitely get the financing and they won't have to worry the deal will fall through at the last minute. One of my preferred lenders can close a home in 8 days after underwriting is already done.
6. Include an Appraisal Gap - Include in the offer an appraisal gap where you, as the buyer, will commit to paying a certain amount above the appraisal value. For example, if you offer a purchase price of $400k for a home listed at $380k and it only appraises for $380k, you can include in the offer that you will pay $20k, etc. over the appraisal. In this case, you will still be covered if the appraisal comes in low, but will give the sellers peace of mind that you will pay above appraisal if needed. Or, you can waive the appraisal contingency all together if you have the funds to make up the difference between the appraisal and sales price.
7. Get Creative - Agents are getting creative with their special stips today. Some are even offering to hold a neighborhood farewell party, pay for storage, offer temporary occupancy, etc. Anything creative that will get their attention.
There is a way to have your offer accepted without offering the most for the home. You just have to think outside the box. You've got this!
