In the first blog of our three-part series on multiple offer strategies, I discussed how to make your offer competitive through price, personal letters or videos, inspection expectations, and earnest money tactics. Now let’s take a look at five more strategies you can consider when developing a competitive offer for a multiple offer situation:

1. Appraisal: We can do a few things here:

  • We can say we’ll do a rush order appraisal, which will get it done in a matter of days (depending on the type of loan you use).

  • We can also say that you’ll contribute up to a certain amount ($5,000 for example) over the appraised value if it’s lower than the purchase price, but not to exceed the purchase price.

  • You can even say that you will waive the appraisal objection – meaning, you’ll get an appraisal done because it’s a requirement from the lender but that no matter the appraised value, you’ll pay the agreed purchase price (this requires you to have enough money in reserve to bring to closing to make up any difference).

  • If you’re putting down at least 20% to purchase your home, make sure you ask your lender if they can waive the appraisal. There are new regulations in place now that allow the appraisal to be waived if certain valuation and lender factors fall in place. If you can waive the appraisal, make sure you note that in your offer!

2. Title Insurance/OEC:  Typically, the seller pays for this fee, but the contract provides the option to allow the buyer to purchase the title insurance. This is a way to increase the seller’s net proceeds without raising the purchase price. However, your upfront costs would be higher at closing.

3. Lender:  Your lender can give you an extra advantage in a few ways. A local lender with a great reputation speaks for itself. The lender can also reach out to the seller’s listing agent and speak to the merits of how they do processing and underwriting and how easy it will be to communicate with them during the transaction. I also like to have the lender speak to your merits as a buyer regarding credit, income/assets verification, and debt-to-income ratio. Another helpful strategy is to have the lender start processing your file before an executed contract is in hand – this will make the final loan approval happen much more quickly, again making you look more solid as a buyer. My preferred lender is able to have your file “credit approved” before you even have a home identified. He can also provide a monetary guarantee to the seller that it will close on the lending side. The lender is a critical part of your home offer process!

4. Seller Concessions:  Don’t even think about asking the seller for any monetary concessions in your offer (credits toward closing costs) if you want to be competitive!

5. Post-Closing Occupancy Agreement:  If the sellers need to stay longer in the home, one thing you can do is say that the sellers could stay rent free for a certain amount of time (rent back period). You can also minimize or omit a security deposit and cover the utilities during that period.

If you have questions about these five elements of a competitive offer strategy, let me know as I’d be happy to discuss in more detail.

In the final post of my series on competitive offers in multiple offer situations, I discuss four more strategies to help make your offer stand out in the Denver area real estate market! Let’s chat if you have any questions thus far!