As the mortgage rates started to increase, so did the amount of time homes linger on the
market. At the height of the market homes were selling in a few days. Now they are taking
months. Instead, sellers now have to negotiate to sell their homes. Even though the market has started to normalize, offers are still being denied. Quite frankly, they get denied because they are just bad offers. Yes the market has returned to normal, but no we are not at the point where low balling will do you any good. You do not want to offend a seller because it’s hard to undo a bad first impression.
This guide is actually meant to forgo any negotiations. By making an offer the seller would be
crazy to refuse, you can lock down a property. It’s crazy to say this, but you just need to make a
solid offer.
Your offer will get accepted if you follow this guide, so the only criteria the property must meet is
you loving the home!
Purchase Price
Our home values are still in a good spot and sellers know that more than anyone. Now is not the
time to low ball and risk offending the seller. As long as the value is there, make an offer at or
close to the asking price. If you need to ask the seller for closing cost contributions make sure to
increase your offer price to make up all or most of the difference.
Appraisal Contingency
Once everyone started talking about inflation, appraisals not coming back at the purchase price
became more prevalent. With the turn in the market, removing an appraisal contingency is no
longer necessary to beat out competition. When using a mortgage lender to purchase you will
have an appraisal contingency. If the contract is overpriced more than likely you will get the
seller to come down to the appraised price. Overpaying for a property is no longer a concern
now that appraisal contingencies are back.
Earnest Money
Earnest money is great because you can get aggressive without any risk. As long as you
terminate within your due diligence period you will be entitled to your earnest money back in full.
My advice for your earnest money offer would be at least 1% of the contract price. Of course
more will always make your offer stronger.
Due Diligence
I always recommend my clients request a 7 day due diligence period. That is plenty of time to
have inspections completed and repairs negotiated. It is also a great way to strengthen your
offer. It shows you are prepared to purchase the property and not wasting the seller’s time off of
the market.
Closing Date
Anything longer than 35 days out from the binding contract is a no go. The sellers have their
home on the market for a reason. They want to get it closed as soon as possible. There are only
a few lenders that cannot get the clear to close in 30 days. A good lender will be able to get it
sooner.
Mortgage Lender
Speaking of good lenders, by using a reputable local lender your offer will stand a better chance
at getting accepted. Nothing is more annoying than dealing with multiple people who have to get
“caught up” with your file. Local lenders are also the ones who make things happen and who will
go the extra mile for you.
In this market the competition is low and from what I’ve seen from offers we have received-
incompetent. Just know that submitting a solid offer is really all you need at this point in time. If
you really like the home don’t waste the opportunity on haggling and potentially losing the deal
or the seller all together.
