Strategies to “WIN” your offer!

Blog Post Image
Real Estate

I like to describe the 2021 real estate market as the Wild West!  Just a few short months ago, we could actually submit an offer for a buyer and negotiate a price.  The past several months have been a whole new ball game.  We have seen a 31% increase in sales price from May 2020-May 2021 (Florida Realtor Organization source) with an average of 3% per month appreciation.  Many of our listings receive multiple offers, with large cash components, appraisal waivers, short inspection contingencies or no inspection contingencies and often 5 to 7% over asking price. 

While this is intimidating for our buyers, there are strategies that we are using to help our buyers “WIN” the house!  Keeping your offer as clean as possible without asking for seller concessions or contingencies is key!  First, ask the listing agent if there are any special terms and conditions that the seller might need.  Maybe they need more time in the house. If they do, consider offering an extended closing date.  Or, if they need to cash out, consider offering a post occupancy.

Second, if your financial position allows you to, offer to pay a portion of the seller’s closing costs instead of paying the appraisal gap.  As the price of the home goes do the seller’s closing costs.  A cash contribution to the seller really affects their bottom line.  

Third, make sure that your escrow deposit shows that you are a serious buyer.  A strong escrow let’s the seller know that your intentions to move forward with the purchase of the home are serious.  Typically, an escrow deposit is 1-2% of the purchase price. In this market, consider a stronger escrow up front or adding to your escrow deposit after the inspection period.  This lets the seller know that you have “skin in the game” and are ready to move forward with the purchase. 

Fourth, if your finances allow, consider increasing your down payment.  Not only does this help lower your monthly payment, it can also help eliminate other expenses like PMI.  To the seller it is another way of showing that good faith that you have the ability to honor the contract and close on the house.

Finally, have your Realtor construct a strong cover letter to the listing agent/seller.  A professionally written letter explaining the terms of your offer helps make it easier for the listing agent to present to the seller.  Additionally, avoid writing a “love letter” which could unintentionally create a discriminatory situation.  Instead, write a letter to the seller explaining what features of the home you like and explain your credit worthiness.