Important: Get pre-qualified
Prospective clients who can get prequalified for a bank loan always have a better chance of winning the deal than clients without a proper financial background. Don’t leave the seller in doubts about your financing. Without this, all the following tips are useless.
Get to know what or who the seller wants
It is always good if you know the information about the seller’s preferences concerning the prospective buyer, as it can save you some time going after an offer where you are not able to meet the requirements. It is therefore advised to find out all the conditions accompanying the sale of a property you want to bid on. It is better to give up in case you find out you are not able to meet them. If the requirements are such that you can meet them, work with your agent on a brief summary that will go together with your bid. This summary gives the vendor some knowledge about you and focuses on your proposal’s pluses.
Don’t underestimate the price
If you were the seller, of course you would be insulted if someone offered a too low price for your home, and then probably you would choose another applicant. So you want to be cautious about this. And that’s even if you deliver a comparative offer in a later stage. Thus the best way is to offer around $1,800 to $4,800 more than the highest estimated bid. Let’s say the highest bid is expected to be $470,000. Try adding some money and come to $473,164 – the offered price doesn’t have to be an even number!
The deposit
A nice large down payment of 10% to 20% always created a good effect. Of course in most cases you can try to settle the final amount of your down payment with the seller after the contract has been secured and usually with a success outcome. The crucial point is that you actually pay the deposit after you sign the contract, otherwise you wouldn’t seem to be a respectable client.
Earnest money deposit
The next technique is quite aggressive but has some great results. Pay the good faith deposit as high as you can afford, as part of the down payment. The earnest money deposit would be lost if you change your mind later and decide not to go through with the deal. You have to pay this money anyway, as the good faith deposit is included in the down payment, but it sends a strong signal to the seller. It tells the seller that you really want to go through with the deal. Since the down payment is easily renegotiable after the deal has been closed, the good faith deposit is what really shows how much you want that property.
Propose a short rent-free stay
In the summary accompanying your offer, propose a free-post occupancy agreement to the seller in case they need a week or two in the property after it’s been sold to settle their affairs. Typically you would negotiate rent, but giving the option of free occupancy for a short period of time might be the detail that decide whether the seller will go for your offer or not.
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