The highest offer is not always the best offer!, by Walter Huff.

The highest offer is not always the best offer!

By Walter Huff

One might think buyers with the highest bid are more likely to buy a home. Well, that is not the case. The seller considers other issues that might lead to one with a lower offer having an opportunity to own the house. Such issues include;

1. PAYMENT PLAN

Cash buyers with less money are more likely to win the offer. Mortgage buyers indicate many processes that have to take place, such as looking for a lender, opening an escrow account, and many more that the seller might find timeconsuming. Although it may seem impossible to have all the needed cash, data show that 43% of homebuyers in 2014 were cash buyers.

2. PRE-APPROVAL LETTER

Pre-approvals are generally acquired from banks and lenders. They show that a buyer can afford a house at a given range of money. A buyer with a pre-approval automatically turns into a virtual buyer. Thanks to the harrowing experiences associated with acquiring mortgages in the current days. Most sellers are not attracted to offers not accompanied by pre-approvals because the buyer is unsure whether he will obtain the loan. Consequently, the seller wants to sell off the property as quickly as possible and does not have time to wait until a buyer gets preapprovals.

3. TIMELINE FLEXIBILITY

When making an offer, it should align with the seller’s interest. Even if a buyer has a lower offer,

it is more likely to be considered. For instance, a buyer might give the seller two months to the closing date so that kids are not transferred in the middle of the term. There are other instances when a house will not be ready in a given period to the closing date. A buyer thus takes advantage of telling the seller that he will take care of the costs, and the offer is more likely to be attractive. If everything is ready on time for the closing date as to be one month

4. A LETTER

Many people that use this tactic are more like to buy the house. Most people who bought houses recently indicate that writing a convincing letter has greatly helped them. The letter shows how the place will be condusive to the buyer. One can document that the property is close to the school, and thus children will not have to travel long distances. One can also praise the seller for the perfect house he has, commenting about the design and other things the buyer found attractive. Such letters are a way to win the seller’s heart and, most likely, even with an offer being among the lowest, might win a chance to own a property. Such letters appreciate the seller and should have a convincing tone.

5. HAVE FEWER CONTINGENCIES

One with fewer contingencies is usually attractive to the seller when making an offer. The buyers are then asked to keep their contingencies minimal. However, there are certain contingencies that should never be waived. Different contingencies can be handled in different ways, such as

6. INSPECTION CONTINGENCIES

Inspection should never be waived because it can adversely affect the buyer. However, the buyer can indicate on the offer that an assessment will be carried out, but the buyer will take the cost of repairs.

7. FINANCE CONTINGENCIES

The contingency should never be left out. However, to convince the seller, it should be carried out very fast. 30 to 45 days of closing and 17 to 21 days are used to get mortgage approval. For a seller to accept a lower offer, the buyer should seek a pre-approval to make the finance contingency less of an issue.

8. DOWN PAYMENT

A seller also checks the potential of a buyer to pay for a home in due time. A buyer with the highest downpayment amount is more likely to be considered. Sellers want to avoid buyers with very high offers as much as possible but with a minimum downpayment. F or a person with probably a 5% down payment, It is an indication to the seller that in the later years, the buyer might not be able to pay for the house. Thus a seller considers a person with more deposit and is more likely to pay for the house in the shortest time possible.

9. ESCALATION CLAUSE

Buyers do not commonly use the method; thus, individuals can take advantage of this. It is a clause whereby a buyer indicates that he will pay a given amount of money over the highest bona fide and is not associated with a home sale contingency. The clause provides the seller with an opportunity to make more money, even if it is with lower offers. In a highly competitive seller market, buyers who use the method have a higher chance of winning a bid.

Thus, before making an offer, a buyer researches the property. Identify the time; lines of the seller and also make sure that whatever is in the proposal is in line with what the seller would be looking for in selling a house.