You found the home of your dreams, only to have them shattered when your offer gets rejected. It’s a terrible feeling that most homebuyers experience at least once in today’s real estate market.
Let’s look at some reasons why your offer might not be getting accepted and what you can do to make sure your next offer stands out.
There Was A Better Offer
According to the National Association of Realtors, homes are receiving an average of 4.8 offers these days. With that much competition, your odds are simply not as good and it can be relatively easy to be outbid by one of those competing offers.
What you can do about it?
One tactic that you could consider to help your offer stand out is to include an escalation clause in your offer. Simply put, you’ll make your initial offer but then include the option of increasing that offer by a certain percentage or dollar amount over any other offers they might receive, up to a certain amount.
Another way you could strengthen your offer is to remove contingencies that would otherwise cost the seller time or money. The most common contingencies that buyers sometimes remove in their offer are the inspection, appraisal, financing, and selling a home before you can close on the new one. Removing these contingencies can be risky, so you will need to discuss all possible scenarios with your agent to decide if this is a good option for you.
A Cash Offer Beat You
Statistics are showing that in today’s market, one in four offers is in an all cash offer and is offering either right at or above the list price. When a seller sees two offers, one being a cash offer and the other requiring traditional financing, they will almost always go with the cash buyer. Needing a loan makes the escrow process take longer, and there is more risk of the transaction being canceled if the buyer’s loan doesn’t get approved.
What you can do about it?
Honestly, when it comes to competing with a cash offer, you are facing an uphill battle. The best way to compete with a cash offer is to get preapproved for a mortgage so that the seller can be reassured that you won’t have to back out due to not having a loan.
You’re Not Giving The Seller What They Want
The list price doesn’t tell the whole story. Of course, the seller wants their money, but what if there was more you could add to the offer to make it stand out?
What you can do?
Being flexible and a little bit more generous than you may like might be something you should consider if you’d like your offer to get accepted. Have your agent talk to the seller’s agent to see if there’s anything extra the seller needs. Maybe the seller needs a place to stay while they try to find their next home. You could offer to lease the home to them after your take ownership. Or maybe instead of offering more for the sale of the home, you could offer to cover their portion of the closing costs. Having your agent take the extra step to find out more of what the seller needs could be the difference between your offer being accepted or not.
The Bottom Line
Today’s market is extremely tough on buyers, especially first-time homebuyers who may not have much extra cash to contribute. This makes having a strong, experienced agent by your side crucial. You need to have a agent, like me, who will go the extra mile for you. Give me a call so we can discuss the market and your home search in more detail.