How to make your offer stand out in a competitive property market
Category Advice
How to make your offer stand out in a competitive property market
If you're looking to purchase a home in a sought-after suburb or estate, securing the property you've set your sights on can be challenging and, in order to increase your chances of success, you need to make your offer stand out from the crowd.
When multiple buyers are interested in the same property, sellers are not only looking for the highest bid, but they're also considering other factors like the buyer's financial stability, the ease of the sale, and their willingness to close the deal quickly.
A compelling offer goes beyond numbers; it also demonstrates your reliability, flexibility, and serious intent.
By employing a few key strategies, you can enhance the attractiveness of your offer and position yourself as the ideal buyer:
Start with a Strong First Impression
First impressions matter, especially in a competitive market. When you make an offer on a property, it's not just about the price; it's about how you present yourself as a buyer. A strong first impression can set you apart and make the seller more inclined to accept your offer.
Additionally, hiring an experienced agent who knows the local market can give you a significant edge as they can help you craft a compelling offer, understand local pricing trends, and, very importantly, negotiate effectively on your behalf. Additionally, a reputable agent can vouch for your reliability and credibility, which can reassure the seller form the get-go.
Offer a Competitive Price
In a hot market, one of the most straightforward ways to make your offer stand out is to submit a competitive price. Sellers are often motivated by the highest offer but be careful not to overbid to the point where the price exceeds the home's market value as this could put you in a difficult financial position later, especially if the market cools down after your purchase.
Know the Market Value
To make an informed offer, it's important to have a solid understanding of the property's market value. Your real estate agent can provide comparable sales data (known as "comps") for the area to help guide your decision. Additionally, considering the home's condition, location, and any improvements will help you determine a fair offer.
Consider Offering Above Asking Price
If the home is in high demand with several interested buyers, offering slightly above the asking price can increase your chances of success. However, do this only if you're comfortable with the price and after doing thorough research to ensure you're not overpaying.
Make Your Offer Clean and Simple
One of the most effective ways to make your offer stand out is to present a clean, straightforward offer with as few contingencies as possible. A contingency is a condition that must be met for the deal to go through, such as securing financing or passing a home inspection and, while they are standard in property transactions, reducing them to the minimum makes your offer less complicated and more attractive to the seller.
If possible, consider removing non-essential contingencies. For example, if you are confident in your ability to secure financing, you could offer a non-contingent cash offer or a pre-approved bond. Additionally, if you're in a situation where you're comfortable with the property's condition and don't foresee any major issues, you might opt for a home inspection contingency waiver. This shows the seller that you are serious and prepared to move forward quickly.
However, be careful not to remove contingencies that could leave you financially exposed. For instance, if you're buying a property in an older neighbourhood or with potential structural issues, skipping a home inspection may not be wise. Always strike a balance between making your offer appealing and protecting your own interests.
Offer a Flexible Transfer Timeline
Flexibility on the transfer date can be a key factor in swaying the seller. Some sellers may want to close the deal quickly, while others may need more time to find a new home.so offering flexible terms shows that you're willing to work with the seller's timeline.
If you have the ability to be flexible with your move-in date or offer a quicker transfer, it may make your offer more attractive as a seller may prioritise buyers who offer convenience and certainty over those whose offers come with conditions that delay the process.
Secure Pre-Approval for Your Bond
Getting pre-approved for a home loan is one of the most effective ways to strengthen your offer as it assures the seller that you have the financial means to follow through on your offer. This can be a powerful tool in a competitive market where sellers are wary of deals falling through due to financing issues.
Pre-approval not only strengthens your offer but also gives you a clearer picture of how much you can afford and, importantly, it also helps you move quickly if you're competing against multiple buyers.
Be Ready to Act Fast
In a competitive market, properties can sell quickly, sometimes with multiple offers in a matter of days so being prepared to act fast is essential.
Move Quickly with Your Offer
If you find a property you're interested in, don't hesitate to make your offer. Your agent can help you submit an offer promptly after a viewing to demonstrate your enthusiasm and readiness.
Offer an Earnest Money Deposit
Submitting a deposit can show the seller that you're serious and committed to the purchase. This is typically a small amount of money (1% to 3% of the purchase price) held in escrow as a sign of good faith.so if you back out of the deal without a valid reason, the seller keeps the deposit. Offering a higher deposit than usual can give the seller peace of mind that you're financially stable and unlikely to back out of the sale.
"If you adopt these strategies and work closely with a skilled and knowledgeable agent, you will generally have a better than average chance of pipping your competitors at the post and securing the property.
when should you then accept the offer? Here are some tips:
- If it is a cash offer with no contingencies attached, but cash offers are typically not the highest. It may, however, mean that you can sell quickly and move on.
- If the offer is for the full asking price, or higher (which may sometimes be the case) and there are no challenging conditions or contingencies attached.
- If you need to sell in a hurry and the offer is not quite what you are looking for, then you could accept it in the interest of saving time and not risking that another offer may not be forthcoming.
- If finance is the only contingency and the buyer has been pre-approved for finance, then that provides a level of comfort that the deal will go through quite quickly.
- If the buyer is putting down a substantial deposit. That usually indicates that they are serious and are likely to secure the finance needed for the purchase.
- If there is work to be done on the house or it is a fixer-upper and the buyer is prepared to take it "as is" at an acceptable price, even if it is a bit lower than expected.
Extract from Property 24
Author: Extract from Property 24
