When you fall in love with a home in your budget range, it can be magical. It might also be the start of a fierce competition; it’s very possible that there are other buyers out there that feel the same way you do. Good news – there are ways to make your offer stand out If you really want that house.
“We're not in the best market to get into a bidding war. If there are six people making offers, you might want to look somewhere else,” he said. But if you really just can’t walk away from the house, Dowd suggests showing the seller that you will love the house just as much as they did.
To accomplish this, try writing a personal letter to the sellers. Tell them why you love the house so much or why living in that area is so important to you. Sometimes speaking from the heart and letting the seller know you’re going to take good care of their home can be more valuable than making the highest offer.
If you really want to let the seller know you’re prepared and ready to buy their house, get a mortgage commitment before making your offer.
“It’s always a good idea to select your lender, and not just settle for a pre-approval letter, but be able to show the seller a mortgage commitment,” Dowd said. A mortgage commitment, or loan commitment, means your lender has already underwritten your loan and approved you for a mortgage based on your creditworthiness and income. The property you select will still need to be appraised before a final commitment is issued, but you’ll most likely be several steps ahead of the competition.
“It shows (the seller) you’re credit worthy and may provide a little more peace of mind,” Dowd said, noting that sometimes offers may fall apart once an underwriter begins the process of verifying income, assets & employment history.
You could also increase the amount of your “earnest deposit.” The more money that you put upfront shows the seller you mean business and are serious about buying their home. This strategy may come at a little more risk, so it’s important to make sure that you have the appropriate contingencies in the agreement of sale – specifically, a mortgage contingency, an appraisal contingency and an inspection contingency. If an unforeseen issue arises, you’ll want to make sure that you can get your money back.
Lastly, remember that the seller is most likely embarking on a major life change; this a huge decision for them. That means receiving an offer might be nerve-wracking for them, just as it is for you. Demonstrating that you understand this can go a long way.
Because as shocking as it may seem, it isn’t always just about the numbers.