16 Tips for Getting Your Offer Accepted
1. Work fast.
The early home offer bird gets the worm! Sometimes, the secret to getting a “yes” is as simple as being the first to offer on a property. Be sure to have automatic alerts set up with your real estate agent, so you’ll instantly be notified about new properties as they hit the market. Then, don’t hesitate! Run the numbers and make the offer! Don’t let fear slow you down.
2. Offer your best up front.
Rather than playing a game with the seller, offer your maximum offer right up front. If they counter and try to make you go higher, just say no! If the numbers work at $90,000, sometimes it’s best to just offer $90,000 and not try to shoot for $85,000.
3. Submit a letter with your offer.
When offering on a piece of property, remember that there is always a person at the other end of the line making the decision, even if it’s a bank REO. So if you want to get your deal accepted, get that person to like you! I think the best way to do this is simple: include a letter with your offer.
This doesn’t have to be anything formal, just a quick message letting the seller know who you are and what you plan to do with the house. It’s important to include a photo with the letter. This lets the seller know that you are not just “some investor.” You are a real person! (Include your family in the photo for added benefit!)
4. Discover the seller’s true motivation.
Always try to determine what the seller’s true motivation is. Are they looking for the absolute highest price? Are they in need of a fast closing? Just yesterday, I walked through a house with someone who called me after finding my “I buy houses” website. While touring the house, I learned that the home is owned by his grandmother, who can no longer afford the tax or insurance payments on the home. They want to use the money to buy her a new car, and soon. This person’s main motivation was not getting the highest price but solving a problem quickly.
5. Feel uncomfortable.
A real estate agent friend once shared, “If I submit an offer, and it doesn’t make me blush, I offered too much!” In other words, when you’re trying to get a good deal, submitting offers should make you a bit uncomfortable! So get out there, make some offers, blush a bit, and get a few killer good deals.
6. All cash helps.
If you can afford to offer all cash on a property, this can help you get an offer accepted, even if other potential buyers have offered more! Sellers love cash buyers, because they know the money is there, and the risk that the buyer will not be able to follow through drops significantly.
7. Remove the financing contingency.
Even if you can’t afford to offer all cash, you can always remove the financing contingency from the offer. Of course, if you remove the financing contingency and then can’t get a loan for the property, you could lose your earnest money deposit. This is a risk, of course, but if you are confident taking this risk, it can help grease the offer and help you get to “yes.”
8. Waive the inspection contingency.
Most sellers know that their property needs a lot of work. Therefore, sellers get nervous when people want to do an inspection of the property. They fear that they will accept an offer, and then a week later, the buyer will back out because they discovered how bad the property really is.
Therefore, if you want to dramatically increase your chance of getting an offer accepted, don’t include an inspection contingency. Again, this will increase your risk, because if you learn something about the condition that you did not expect, you can’t back out without losing your earnest money deposit. However, removing the inspection contingency can be a powerful way to make your offer stand out.
9. Close faster.
Once a seller decides to sell their property, they can’t wait to get that burden off their shoulders! Make your offer stand out by offering a shorter (sooner) closing date. Of course, if you are using a normal bank loan, you might not have much of a choice (banks typically take 30–45 days to get through all the paperwork to buy a property).
But if you are using cash, private, or hard money, set a quick close date.
10. Give two offers.
When you submit an offer on a property, the seller will compare what you offered with what they are asking. If you offer $150,000 on a $190,000 house, they will instinctively do the math and say to themselves, “Wow, they are offering me $40,000 less than what I’m asking.” Instead, consider submitting two offers on a property, so the seller compares the two offers, rather than the asking price and your offer. Perhaps one offer could be for $150,000 cash, and the other for $165,000 with financing and will take 60 days to close. The seller is now trying to decide which offer is better—and ignoring their asking price. This “price anchoring” strategy is used in many different industries but only rarely in real estate (which is too bad, because it works really well!).
11. Offer more earnest money.
Show the seller you are serious by offering a larger earnest money deposit. Although 1%–2% is customary, consider offering significantly more to show the seller how dedicated you are. Just be sure you have those contingencies in place, should you later want to back out
12. Provide your pre-approval letter with the offer.
If you’ll be using bank financing for the purchase, be proactive and include a copy of your pre-approval letter with your offer. It’s one thing to tell the seller that you can qualify, but it’s another for them to physically hold the pre-approval letter in their hands so they know that the sale will go through.
13. Include an escalation clause.
An escalation clause can be included in an offer and is used when a property might have multiple bidders. It essentially says, “If someone else bids higher than me, this offer will automatically increase to $X above theirs, up to a certain point.” So you might offer $100,000 on a property but include an escalation clause that says you will pay $500 higher than any other offer that comes in, up to $110,000. This way, if someone comes and offers $106,000, your bid will automatically increase up to $106,500. The danger of an escalation clause, of course, is that it tells the seller exactly how high you will go!
Therefore, only use an escalation clause if you know there will be multiple offers, and never make your maximum price higher than what you should pay.
14. Offer to clean out the property.
Houses can accumulate a lot of stuff over time, and removing this stuff can be incredibly overwhelming for the seller. Therefore, if you are offering on a property that has a lot of junk in it, make your offer stand out by offering to clean out the property for the seller. Or, give the seller two offers, one that includes junk removal and one that doesn’t!
15. Pay the seller’s closing costs.
Selling a home can be expensive, so if the math works for you, consider offering to pay part or all of the seller’s closing costs.
16. Offer again.
Finally, remember this: Just because your offer was turned down, that doesn’t mean you can’t offer again soon. I once offered $60,000 on a property that was listed at $80,000 and was rejected. I let it go. After the property sat on the market for three more months, the seller dropped their price down to $59,000. I offered $40,000 at that point, and my offer was accepted—$20,000 less than I had originally offered to pay!
Excerpts reprinted from BiggerPockets blog