What buyers can do to improve chances their offer is accepted
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The real estate market can be highly competitive. When inventory is limited and prices are high, prospective buyers must be ready to pounce and make an offer before the competition kicks up and the home is off the market.
The ability to move quickly with an offer can help buyers land a home in a competitive market, but that decisiveness may not be enough to ensure an offer is accepted. Buyers accustomed to the home buying process know there’s no guarantee an offer will be accepted, but they can take steps to improve their chances of standing out in a competitive market where sellers may be fielding multiple offers at once.
— Use recent sales data to inform your offer. Though there are places with non-disclosure laws that do not mandate property sales prices be made public, such data is readily available in many areas. That information can be invaluable to home buyers in competitive real estate markets because it gives them a strong idea of how much homes have been going for in towns and even specific neighborhoods they’re targeting with their search. That data also tends to be relied upon when sellers list their homes. Sellers may see how much a neighbor’s home sold for and use that to set the price of their own homes. With that knowledge in hand, buyers can tailor their offers to reflect recent sales figures.
— Obtain a mortgage preapproval. Bank of America notes that a mortgage pre-qualification estimates what buyers might be able to borrow based on a credit check and information they provide, such as income data. Once that information is provided, prospective buyers may obtain a preapproval if a lender deems them creditworthy. A preapproval is important because it shows sellers that a buyer has the credit and financial backing necessary to follow through on an offer. Many sellers ask if bidders are preapproved because the preapproval facilitates a quicker sale.
— Increase your earnest money offer if you’re truly committed to buying a particular home. Fulton Bank advises buyers to offer more earnest money, which is akin to a good faith deposit toward the purchase of a home. A typical earnest money deposit may be somewhere between 1 and 3 percent of the purchase price, but an earnest money offer of 5% may indicate to sellers that you’re a committed buyer. But Fulton Bank notes that buyers who rescind their offers may or may not have their earnest money offer refunded.
— Speak to your agent or realtor about including an escalation clause. It’s always best that buyers work with a real estate agent or realtor when looking for a home. When you find a property that interests you in a competitive market, discuss with your real estate representative if an escalation clause might boost the chances that your offer is accepted. Rocket Mortgage notes that an escalation clause is part of a real estate contract that indicates a buyer is willing to automatically raise their offer on a home if the seller receives a higher offer. The escalation clause indicates the most a buyer is willing to offer. The inclusion of an escalation clause is a big decision, which is why it can be so helpful to speak with your representative before deciding for or against including one in your offer.
It can be hard to compete in the real estate market. But there is much buyers can do to increase the chances their offers are accepted.