McKinney TX Real Estate

OH NO! There's a HIGHER OFFER than ours? Guess we'll move on to another house, right?

I hear this comment quite a bit when working with home buyers. The buyer found the perfect home, got their nerves together to make an offer on the home, only to find out that there are other offers on the property.

Here's what buyers need to know about making a STRONG offer.

First, price is only ONE piece of the puzzle. Sure, it's a big one and it's best to not insult the seller with a low-ball offer that has no supporting documentation. But price is just one part of the offer. What are other ways to make an offer strong?

1. Quick Closing Date. This assumes that the seller is ready to move, or has already moved out of the property. The buyer's agent needs to be on their A-game in asking the listing agents all the right questions prior to making an offer. If the seller is ready to move the property, then a 30-day closing OR shorter is attractive to the seller. If you can time the closing so that the seller doesn't need to make another mortgage payment, then all the better!

2. Generous Earnest Money - There is no standard amount buyers must put down as earnest money - not in my area at least. A good rule of thumb is about 0.75 -1% of the sales price, but I've seen as little as $500 go on to be accepted on a $200,000 home. By jumping up your earnest money amount you are telling the seller, "I am serious about buying your house!". Should the contract fall through due to the BUYER'S FAULT, the seller gets to keep the earnest money...so extra is better to sellers.

3. No Home-Sale Contingency - Renters, this one works out in your favor. In the situation where two contracts have equal terms, with the exception that one has a home-sale contingency and one does not, the one withOUT a home sale contingency is generally MUCH stronger and less risky to the seller.

4. Include a Pre-Approval letter from your lender - By showing the sellers up front that you have already spoken with a lender about your ability to purchase the home, you will appear stronger than another buyer that has not. In my opinion, a pre-approval letter should ALWAYS be the first step in the home buying process!

5. Choose an Agent with a Good Reputation in Your Area - OK, so a seller won't ignore a great offer presented by an unknown buyer's agent. Money is money to the seller. But, let's say you are up against another offer that is for all intents and purposes EQUAL. The seller turns to the listing agent and asks for their opinion. Lets just say that the listing agent has heard that Agent B has a less than stellar reputation when it comes to repair negotitiations. Maybe they've done a deal or two with Agent A that have were smooth sailing. Which agent the listing agent prefers could factor in.

So, when faced with the multiple-offer situation, there are other negotiating points that can amp up an offer without having to pay more than you are comfortable with. A good agent will know how to do this and fight for you every step of the way!

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