With home prices still increasing, and inventory still far below demand in many parts of the Massachusetts Real Estate market, sellers are still in the driver’s seat in most cases. You see it happen all the time – a home is listed, you receive alerts and ask your agent to show you the property, and then when you arrive for the Open House, you’re one of 50 groups going through that day.
When you find that home you love and it’s within your price range, you’ll definitely be bidding against several other buyers these days.
That means you need to find a way to make your offer more noticeable and more attractive than all those other offers. Find out how to do that with these tips to make your offer stand out when buying a house in Boston.
Pre-approval is simply a lender’s approval after you’ve submitted all your financial information, for a mortgage loan of a certain amount. With pre-approval, assuming nothing changes in your financial situation, you are likely to get the loan needed for buying a house inBoston.
And that’s why it can make your offer stand out. If nothing else, it will put your offer on par with the others that will also have pre-approval letters. Think about it this way – if 10 parties submit offers and 3 of them don’t even submit with pre-approval letters, guess which 7 will be considered more seriously!
In a seller’s market where a property often has several offers coming in, your pre-approval letter can increase your chances of having your offer accepted. The seller will know that you can get the financing, and you will be seen as a serious buyer. Sellers typically skip over buyers who might not be able to get financing.
Make a Competitive Offer
Another way to make your offer stand out when buying a house in Boston is to make a strong, competitive offer – frequently at or over the asking price. More often than not, though, this requires the expertise of a good local real estate agent.
A competitive offer is one that falls in line with fair market value. You want to start strong, but still need to keep market value in mind. At NextHome Titletown Real Estate, we can perform a comparative market analysis to determine that fair market value, and can then advise you on how to proceed.
To find out more about making a competitive offer, just callus at (617) 657-9811.
Offer More Earnest Money
To be seen as a serious buyer and to really make your offer stand out when buying a house in Boston, you can increase the earnest money, which is money paid at the time of offer – usually, a flat amount that works out to about 1% to 3% of the purchase price – with the purpose of protecting a seller from a buyer who makes too many offers. Earnest money also positions you as a buyer serious about purchasing the home. And if you back out of the deal without good reason, you will likely lose that money.
Offering more earnest money, though, carries little risk if you really are a serious buyer, because when the buyer accepts your stand-out offer, the money goes toward the purchase price. To find out how an agent can help you with this earnest-money offer, call (617) 657-9811.
Go Easy on the Contingencies
Contingencies provide buyers a way to address unforeseen issues that may arise, such as the buyer’s inability to get financing or problems discovered by the inspection. Contingencies are a typical part of the process, but can prolong negotiations or, even worse, eliminate you from the running.
Some common contingencies include:
- Home Sale Contingency
- Inspection Contingency
- Mortgage / Financing Contingency
- Appraisal Contingency
- Title Contingency
So, in order to make your offer stand out when buying a house in Boston, don’t go overboard with contingencies, as many buyers are prone to do (understandably, because they are making a huge investment, often for the first time, and don’t want to end up screwed). Yes, go for necessary and reasonable contingencies. But ask for as few as possible in order not to create additional problems for the seller. Remember, a cash offer with a quick close and zero contingencies is often about the strongest that there can be.
Consider an Escalation Clause
An escalation clause provides you a way to automatically increase your offer up to a set amount if needed. Escalation Clauses are used more commonly in hot sellers’ markets where buyers are regularly outbidding one another. This can be a valuable way of making a stand-out offer for buying a house in Boston when pre-approval, a competitive offer, more earnest money, and few contingencies just aren’t enough.
An escalation clause does carry some risk, though, because it may allow the seller to know that you are willing to pay quite a bit more than you first offered. The key here is to work with an agent to reduce that risk and make this an effective strategy. You can request that the Escalation Clause is dependent upon a verified and legitimate competing offer.
Use an Experienced Local Agent
It should be obvious that all these tips and strategies require the assistance and expertise of a qualified local real estate agent. Using a good agent just may be the best way to make your offer stand out when buying a house in Boston. Find out today how our agents at NextHome Titletown Real Estate can help you make that winning bid. Send us a message or give us a call at (617) 657-9811.
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