Real estate market prices are always dictated by supply and demand. In a seller’s market, there are more buyers than sellers, thus inventory levels decrease. When this happens, the supply is reduced and prices inevitably rise. In many segments of our local real estate market, we are seeing quick sales and often multiple offers. So what can you do to help your offer stand out so you can get your dream home?
Don’t Lowball ~ Know the Market
As they say, “You only have one chance to make a first impression”. You need to understand the market, that is knowing what is currently on the market as well as what other comparable homes have recently sold for. In a seller’s market with the potential of multiple offers, your lowball offer will be immediately placed into the “Reject” pile, and you most likely will not receive a counteroffer. So our suggestion is to make your highest and best offer at the outset, especially if the listing is new to the market and you have been informed that there are other offers on the table.
Make a larger Escrow Deposit
For a strong offer, we would recommend placing 10% of the purchase price into escrow, so the Seller knows that you have skin in the game and won’t be likely to walk away from the deal. You will usually make an initial deposit at contract signing, and then the balance of the deposited funds by the end of any inspection period. Of course, this isn't always possible, especially if you are financing more than 90%. But the larger the deposit the better.
Write a Cash Offer
We have all heard the saying “Cash is King”. This is certainly true in South Florida real estate, where close to half of our deals are in all cash. Sellers will definitely be more likely to consider an all-cash offer over a finance offer, all other things being equal.
Make a Short Inspection Period
Many of our contracts are written “As-Is”, meaning that the buyer can cancel for any reason during the inspection period for a full refund of deposits. If you really want the house, consider making the inspection period super short (under a week), or waiving it altogether.
Sellers do not want to tie their homes up in a contract with contingencies. Most contracts have inspection contingencies and some have finance contingencies, but the reality is that to a seller, a contingency is a potential deal-killer. Want a contingency on the sale of your house? In a buyer’s market it might fly, but in a seller’s market, you can forget it. All in all, contingencies in a purchase and sale contract are only designed to protect the buyer. You will ultimately have to decide how much of that protection you are willing to give up in order to increase your chance of winning the house.
One way to sweeten the deal is to offer to close quickly, especially if the seller has already moved. If not, find out when they want to close and construct your offer to line up with their timeframe.
Submit a Pre-Approval Letter with your Offer
If you are like over half the buyers in our market and need to get a loan for your purchase, be sure to have everything in order before you make an offer. We have excellent lenders to recommend who will be able to take your application and approve you before you even find the property. Having that pre-approval letter to accompany your offer can make all the difference when compared to other offers which may not have it.
Hire the right agent
Who represents you in this most important transaction really matters. You need a Boca Raton real estate agent who is aggressive in both finding you homes to see, but also in writing the offer properly and competitively so you have the best chance of getting the home. Reputation matters and the seller’s agent will prefer to work with a no-drama agent with a good reputation for getting transactions done efficiently.
You will definitely want an expert on your side to ensure that everything goes smoothly from beginning to end.
Gloria Singer is the Broker of Boca Expert Realty, a boutique Boca Raton real estate company with a focus on professional service and an unparalleled customer experience. Our select agents are amongst the top performing professionals in the field. Visit www.BocaExpert.com for information on Boca Raton, Delray Beach and Highland Beach real estate and to connect with an expert in the local market.