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In seller’s market, buyers are often faced with multiple offers on every home they write an offer.  After multiple losing offers they become discourage and just ask “how does my offer get chosen?”  Many times they think it is all about the dollar and of course this is a big part but there other factors that a good seller’s agent will point out to the seller. 

Terms of an offer a seller will be looking at when making a decision:

1. The sales price – as already stated this is a main point of the offer and is of course the first things sellers will look.  This dictates all other terms but isn’t the only thing to be considered
2. Buyer’s closing costs – Does the buyer need help with closing cost?  Typically the next to note is if the buyer needs help paying their closing and how much money is the buyer requesting to help pay these costs.
3. Type of Loan – The type of loan that the buyer is approved to purchase the home with is very significant because it can affect the repairs required and time to close the loan.  Cash is king – as the saying going.  Cash can close fast and repairs as pertaining to financing are not an issue.  Conventional is the next preferred loan type.  Conventional loans typically require more down and less repairs.  They can usually close within 30 days.  FHA, VA, USDA are the loans they sellers tend to prefer less than Conventional.  These loan types require little or no money down, therefore, the lender wants the property to in the best conditional possible.  They can require repairs to bring the property up to a minimum standard.
4. Appraisal – Buyer can waive the appraisal (this is almost always done on cash offers). This is harder to do on offers with a loan involved.  The buyer needs to be aware of he does this he cannot cancel the contract based on appraisal without losing his earnest money and risk of being sued.  He can, however, pay the difference in the appraised value and the sales’ price.
5. Inspection period – No inspection is the most desirable in any seller’s mind but buyer’s need to be aware of they are giving up the right to back of the agreement if they discover a problem.  The buyer may state he wants an inspection but will not request any minor repairs or is only inspecting major systems.
6. Occupancy period – Some sellers need time to move out after closing and offering the seller a few days after closing at no cost to them can put your offer over the top.

 

An agent can write in an escalation clause that states buyer will pay a certain amount over highest offer up to buyer’s top dollar. (Example, sales price to increase in $1,000 increments above the highest price up to $235.000.)  You may ask for proof of highest offer. 

 

As buyer’s try to purchase the new home in this hot market, they need to be equipped with a few essentials -  1) An agent who is aware of how to handle multiple offers 2) a well-written approval letter 3) LOTS OF PATIENCE!