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Real estate investors can be competitive – especially if a hot ticket property comes onto the market. So, in order to beat the competition and get your offer accepted, you are going to have to be crafty.
When buying a house, a winning real estate offer is usually three things: fast, simple, and lucrative for the seller. After all, the seller does not want to wait months trying to close a complicated transaction when another offer could get the property off their hands in a matter of weeks or days.
So, if you want to get your foot in the door and the key in your hand, here are seven tricks to help you get your next real estate offer accepted.
Before we dive in, you should know that rarely is it a good idea to start writing a real estate offer without speaking to a mortgage broker first. Often, by working with a broker you can save money on your purchase or get a better deal on your mortgage early, and make the deal close smoother.
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Put Your Best Foot Forward
Sometimes, if you think you can get away with it, it can be tempting to bid less than your maximum amount when you are buying a property. Why should you pay the highest amount of money if there is a chance you can get it for less? There is a good reason.
If a property has a great deal of competition, with multiple other interested parties viewing the house and writing offers of their own, you do not want to risk getting priced out before ever entering into negotiations. If you are pre-approved for $350,000 but you think you can get away with offering $320,000 on a $300,000 property, you may be better off avoiding the risk and going all-in. Then, if the seller asks for more money, just walk away knowing that the property was not going to be yours in the first place.
Make a Real Estate Offer Early
The early bird gets the worm, and early offers are often accepted. Whenever you find a property that you would like to purchase, make sure you do your research quickly and get your offer in as early as possible. Highly motivated sellers often accept the first offer they see if it satisfies them, so the longer you wait the more likely you are to miss your window.
That being said, you should never let the desire to get an offer in overshadow your need to properly investigate a property. If you sign a contract to purchase a property that you made an offer on early and it later turns out to be full of problems, you will not be satisfied.
Make Strategic Real Estate Offers
Experienced real estate investors and buyers with a lot of ready cash, will often make easy-to-accept offers by offering to pay a large portion or all of the purchase price in cash. This allows for faster closes due to the reduced hassle of working with a lender. If you are capable of doing so, this may be a good option for you. Otherwise, you will need to be strategic with your offer to beat them out.
Often because these all-cash offers close faster, investors will try to offer less money in exchange for the convenience. So, to beat them you can try to outbid them and try to work out the fastest, or most flexible closing period you can.
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Use a Well-Connected Realtor
Your realtor is your right hand in the world of investing, so make sure you have one who is more than capable of reaching out. When approaching an offer, your realtor should be asking the seller’s agent what they need in order to close the deal. Then, once they have this information, they should be working with you to satisfy those needs through any connections they can so that your offer can be accepted.
A well-connected agent will also often have insight towards new properties that have come onto the market that suit your needs and should be leading you to them. This will ensure the properties you are looking at are already the ones with the highest likelihood of accepting your offer.
Remain Flexible With Your Real Estate Offer
Flexibility is a remarkable quality in real estate. By remaining flexible you immediately appear more appealing to sellers. For example, if you are able to be flexible with the closing date instead of holding firm to a specific time, the seller has the opportunity to close faster or slower, whichever suits their own needs for the property.
As well, you can remain flexible on certain conditions. If your lender permits it, try to remain flexible on inspection and appraisal conditions on the sale. Many respectable listing agents will already have the property appraised prior to putting the home on the market. Unless you are certain an appraisal will get you a better deal, or it is required by your lender, waiving this condition can make it easier to have your offer accepted.
Consider an Escalation Clause in Your Real Estate Offer
An escalation clause is an agreement to raise your offer in the event of the seller receiving a better offer. These clauses are often capped by your maximum offer amount and can be very appealing to sellers receiving more than one offer. This way, you can still offer a lower price to see if the seller bites but can easily raise your offer in the event someone outbids you. This trick does not work if you offer your maximum straight away.
Do Not Be Overly Demanding
Sellers want to have a seamless and easy exchange. So, it is important you try to give it to them. Instead of adding a ton of conditions to the sale such as the purchase of current furniture or requiring certain repairs be completed prior to the closing date, you may want to consider skipping that step. While it may be possible to have these things done, it can make a sale look complicated and intimidating for the seller. Instead, try to inquire about things such as furniture after the sale is contracted whenever possible.
Bonus: Get Pre-Approved Before Making a Real Estate Offer
One of the easiest ways to make winning offers the majority of the time is to get a pre-approval. With a pre-approval from an experienced lender, you are appearing as a much more serious buyer. You will also have an exact figure for your maximum bid that you can use for your offers.
To get started with a pre-approval today, give us a call at LendCity and one of our experienced agents will get you set up with the best option for you as quickly as possible. We can be reached at 519-960-0370 or you can visit us online at LendCity.ca. Alternatively, click the link below to book a free strategy call with our team at LendCity today.