4 Tips for Making an Offer That No Homeowner Could Refuse

In the real estate market, sellers readily turn down purchase offers. Seasoned negotiators use several strategies to sweeten offers to buy homes. Rather than letting your dream home get away, use these four tools to win over private sellers and real estate agents. 

1. Seek Pre-Approval for a Mortgage

While some people can afford homes without debt, most people get mortgages to buy homes. According to Zillow, more than 60% of American homeowners have mortgage debt. Real estate agents and private homeowners expect offers to come from prospective buyers with mortgage offers.

Even if you've received a quote from a loan officer, your mortgage might not be approved. Sellers would rather entertain offers from cash buyers than debt-backed offers. One way to improve your offer is by receiving a pre-approved mortgage offer. 

Expect to wait a few weeks before finalizing a financing agreement. When visiting your bank of choosing, expect to bring important financial documents such as tax returns, bank statements, and proof of income.

Keep in mind that being pre-qualified isn't the same as being pre-approved. Don't bother telling a home seller that you've been pre-qualified for a mortgage. This won't get you anywhere. Pre-approval, however, can hold substantial weight in negotiations. 

2. Use As Few Contingency Clauses As Possible

Real estate closings are full of contingencies, which are potential future outcomes that affect buying decisions. In the real estate world, the most common contingency is the outcome of a home inspection.

Certified home inspectors determine whether homes are structurally sound. Common causes of failed home inspections include plumbing issues, pest infestations, signs of mold, and bad foundations. Since these issues can cost tens of thousands of dollars to fix, sellers almost always agree on home inspection contingencies. 

Other contingencies can make your offer less attractive. For example, requiring the seller to pay for minor cosmetic issues if an inspector finds any won't make your seller happy. 

Buyers use contingencies to protect themselves. In some cases, they give buyers a legitimate reason to back out of real estate deals when they get cold feet. Limiting your use of contingencies will show the seller how serious you are, making your offer more attractive.

3. Have Your Lender Back You Up

Pre-approved mortgages make offers more attractive. When competing with cash buyers, however, documents that prove you've been pre-approved may not impress sellers enough to choose your offer. 

Ask your loan officer or a bank representative to contact the seller on your behalf. You could also ask the representative to accompany you to meet the seller in person. Even if your offer isn't accepted, bringing a lender to the table is always worth the effort. Most banks provide this service for free. 

4. Put Down Substantial Earnest Money

Sellers need to know that potential buyers are serious. Nothing turns a seller off more than cold feet. 

Buyers use earnest money to show sellers just how serious they are. Usually ranging between $500 to $1,000, earnest money gets forfeited if you back out of a real estate deal. Putting down more earnest money may sweeten your purchase offer.


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