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Craft An Offer A Seller Cant Refuse
Common sense tells you that when it comes to buying your dream home, offering a lot of money helps.Knowledge that's not so common: Even in real estate, money isn't everything. Buyers with the biggest offers don't always prevail.If you sweeten your offer with intangibles, your bid will stand out in neon lights, say three noted real-estate experts. (Bing:How low is too low for a bid on a home?)The success of this strategy hinges on thinking carefully about the needs of a seller. Each is different. For example:
- The moving seller: Sellers in the midst of purchasing and moving into a new home may want to close the sale of their old house quickly.
- The burned seller: A seller who was stiffed by a previous buyer who sounded committed and then abandoned the deal may need to trust that this sale will truly close.
- The busy seller: These sellers may love the relief of letting their home go "as is," freeing them from worries over inspections and repairs.
- The sentimental seller: People relinquishing a longtime family home often want assurance that the new owners will treasure it as they had.
Here's how our experts say it's done:
1. Hire a skilled negotiator.
You might think that with today's market saturated with homes for sale there'd be little competition among buyers. But you'd be wrong. At least in some markets, the stand-out entry-level homes that are priced right are generating multiple offers. (Read "House hunting? Time for homebuying negotiation boot camp.")Your secret weapon against such competition is an experienced, well-trained real-estate agent. Buyers who don't use an agent "are shorting themselves the knowledge and experience," Glink says. Sellers pay agent fees so there's no DIY discount. "If you don't use a broker, you are not going to get the house for 3% less," Glink says.Article continues belowScreen several agents. Ask about any advanced training. Hayman advises asking how many years they've been in real estate, how many buyers they've represented and if they specialize in the geographical area you're interested in. (Avoid agents who try to work the whole town.) Look for credentials from institutes such as Wickman's and Hayman's and the National Association of Realtors' "accredited buyers' representative" designation.Read: Do you need a buyer's agent?2. Get pre-approved for a mortgage.
Before you make an offer, get approved for a loan. This gives you almost as much power as a buyer with cash, Hayman says. (Caution: Don't confuse this with "prequalifying," a quick chat in which you tell a lender how much you make and where you work.)Get started by printing and filling out a Uniform Residential Loan Application and Statement of Assets and Liabilities, here, at Freddie Mac. Take the package to lenders to shop for price and terms. Ask your lender to write a letter you can show sellers saying you're approved to borrow up to, say, $200,000."If they know you have a loan commitment in place, they'll treat you as a very serious buyer, even if your initial bid comes in below what they were expecting," Glink says.
- On our blog, 'Listed': Lowest-priced homes have lost more value
- Your bid won't fall through (as some do) because you can't get financing;
- Sellers get their money more quickly, in 10 days to two weeks instead of the 30 days a bank typically requires to approve a loan. "That could make or break the deal in some cases," Hayman says.
3. Learn all you can about the seller.
This job is tricky. But it's crucial. "If we want make an offer that a seller is going to be attracted to, we have to understand what is important to the sellers," Wickman explains.