5 Tips For Making Your Best Offer

If you're actively in the real estate market, you know how competitive it is. The supply vs demand has been favoring sellers for quite a few years nationally as well as locally here in San Diego. 

It is not uncommon for a listing to have 2, 3, even 10 offers within the first week of marketing the home. A housing shortage combined with extremely low-interest rates has catapulted home buyer interest.

So how do you make your offer stand out and get accepted? Here are 5 tips that could help you write that winning offer.

Set Your Expectations

As mentioned above, the current market is highly competitive. This means buyers who are looking to write low balls offers are going to wear themselves out. In fact, it might even help the seller leverage your offer to get more money from a normally priced offer.

So it's best to set your expectations in regards to list price. Most communities in San Diego are seeing an average offer acceptance price above the original list price. This doesn't mean you always have to do it. We always believe in running comps before you offer, just don't be surprised if the home sells for $25k, $50k, sometimes even $100k over asking.,

Be Ready To Move Quickly

An everage escrow period is around 30 days, sometimes even 45 days in a more balanced market. However, close of escrow is getting shorter and shorter as eager buyers are struggling to make their offers more appealing.

This means, you'll have to do the same to compete. The good news is if you're getting financing on the home, many lenders have started to approve offers with 25 to 21 day closes. As the market gets faster, so do we.

Favorable Terms

This is a great way to increase the likability of your offer without coming up in price. Terms are often in regards to the timelines or removal of certain contingencies. There can also be additional financing terms or anything really if you are trying to get creative.

In a multiple offer situation, we always recommend trying to lower the number of days on any and/or all contingencies. Here is what I would recommend if you are able to do so:

Loan Contingency 21 days - We recommend 17 days

Appriasal Contingency 17 days - We recommend 14 days

Inspection Contingency 17 days - We recommend 12 days

Lowering the contingency days will show the seller you are motivated to move quickly and will not remove the home from the market longer than necessary.

Seller Rent Back

Offering the seller a rent back is another way to better your offer in lieu of a price increase. The question is, what will you be charging the seller to rent the home back? Often we see buyers ask for the rent to cover their PITI (Principal, Interest, Taxes, and Insurance).

This would allow for the sellers to stay at no cost to the buyers. That being said, it is not uncommon for buyers to offer it for free. We've seen plenty of offers in the current market on both the list and buy-side that have had a FREE rent back.

Purchase Price

After all is said and done, the best option to strengthen your offer if you REALLY love the home is the price. It may seem obvious but while everyone is always looking for a secret strategy to write a winning offer, price will be the great equalizer.

Knowing your budget is key to being confident with your offer. If you don't want to miss out on the home, put your best foot forward with terms and price. Ask any homeowner that's owned a home for 20+ years if they regret making a strong offer to get the home. 

If you or someone you know is looking to buy, sell, or invest in real estate, feel free to reach out to us. We would love to be your real estate resource!