This week we just got a client's offer accepted in a multiple offer situation. How? I'll give you a hint: it's not just the $. Here are a few need to know tips for making your real estate purchase contract stand out.
1. Stay away from FHA. FHA loans are awesome, especially for first time buyers, but in a market where sellers are seeing the full spectrum of finances, a small down payment FHA loan will not stack up against a conventional. More paperwork, more time, more hoops. If you can, go conventional. (Tip: 5% down conventional with manageable PMI exists...message me for lender info)
2. Frontload your deposit. Let's say you're buying a $500k home, with 10% down. If you are a seller, which looks better? $1,000 initial deposit, $49,000 the day of closing ORRRR....$10,000 initial deposit, $40,000 right after home inspection? The latter makes you look like you have more skin in the game. You mean business, and have the funds at the ready to prove it. (Tip: It is extremely hard for a buyer to lose their deposit in New Jersey. You only run the risk of losing part/all of your deposit if found in breach of contract.)
3. Read the room and shorten the dates. Vacant home? They probably want this off the books. Have your lender run all your income/credit credentials so you are approved, not just pre qualified. This allows you, your agent (us, duh...) and your lender to put aggressive but maintainable dates in the contract, not 45-60 day closings. The seller is just seeing that as more carrying costs, etc.
4. Include a personal note. Yes its cheesy, but we watch all the ABC Family Christmas movies...we aren't afraid of cheesy. Tell them why you love their home. Tell them also how ready you are to make it your home, and you are willing to do whatever it takes to overcome any obstacle. Chances are, this was a home for them, not some money sitting in an interest bearing account, and a personal letter goes a long way.
5. Get your professionals in line ahead of time. When I submitted this offer, I let the listing agent know who our attorney is, who our title company is and the person of contact at the title company. We also let her know we understand the home is in a flood zone, and we already attained multiple flood insurance quotes before submitting the offer. We submitted proof of all funds used in the transaction. So, basically, when the sellers sign this, this is going to be one smooth ride to closing. No learning on the job, no figuring it out as we go along. One well oiled machine. This goes a LONG way with a seller, especially one who has already relocated out of the house.
That's my top 5 for now. Any questions on writing strong offers in a shark's market? Drop me a line anytime. Chris@UpgradeYourShell.com
See you next week!