The spring selling frenzy is here, so if you’re planning to purchase a home, consider these tips for how to outshine other offers.
With the beginning of the spring market, we can expect high levels of activity; an influx of sellers are listing their home and more buyers are set to make a purchase.
However, demand usually tops supply at this time of year, so there aren’t enough houses for all the buyers that are out house-hunting. Many multiple-offer situations tend to pop us as a consequence of this imbalance, so, if you’re a buyer, how can you ensure your offer stands out in that kind of environment?
It goes without saying that you first want to consider the price. The highest price doesn’t always win, but it’s certainly part of a winning formula. I encourage my clients to put their best foot forward and make a meaningful offer on a house they love so that, if outbid, they won’t be left feeling disappointed, because they’ll know you gave it your best shot.
Consider the contingencies. In most cases, this includes the home inspection, an appraisal, and a finance contingency. Waiving any of those will cause you to shine compared to your competitors.
A word to the wise: Have a pre-inspection done on the home so that you won’t be met by any surprises, should your offer be accepted. If the pre-inspection doesn’t turn up anything particularly concerning, waive the home inspection.
Before waiving the appraisal, talk to your lender, your agent, your spouse, or anyone else involved with the transaction.
As far as the finance contingency is concerned, if waiving is not an option, find a lender that will run you through underwriting quickly and, if possible, trim the process down to 10 days as opposed to the 21-day standard. In the event that you are able to waive it, I recommend doing so.
One lesser-known trick that I suggest to buyers is to write a letter to the seller. If the home is perfectly aligned with your vision for you and your family to make memories and spend many happy years there, write about it and how you felt when you walked into the home for the first time. Because most offers are usually similar, this will make yours seem a little more than ordinary.
If you have questions or would like to talk more about what you can do to make your offer stand out in the crowd of offers, feel free to contact me. I look forward to talking with you soon!
Buyers often wonder what they can expect after handing over their earnest money. Today I’ll answer that and more.
When I work with buyers, there’s never a shortage of questions regarding earnest money. They’re curious about how much they can expect to spend, who holds it, and how it’s protected. I’ll answer these questions and more today:
“How much can I expect to spend?”
In the Washington, D.C. area, earnest money accounts for 3% to 5% of the sale price on average.
“Who holds the earnest money?”
It should always be held by a title company.
“How is the earnest money protected?”
This is a high-priority question for buyers because, obviously, no one wants to lose their deposit. To answer this question, I’ll enumerate the different types of contingencies that I often write into each contract:
•Home inspection contingency: This part of the contract will contain specific timetables for the inspection and the response concerning the inspector’s findings. If, say, the contingency is for seven days, we have that much time to get the inspection done, receive the report, and decide whether we want to negotiate the items found or nullify the contract altogether. Should we decide to void, you’ll sign a release agreement, thereby allowing you to reclaim your earnest money.
•Appraisal contingency: As a general rule, I use 15 days for this contingency. The lender will order the appraisal and we won’t need to be present. If the home’s appraised value turns out to be lower than the sale price, it’s your right to void the contract and reclaim your money.
•Finance contingency: Here, I use between 21 and 23 days. When you go to contract, you may have a pre-approval, but the financing doesn’t stop there—your lender will request more documentation and probe a little deeper into your financial situation. At the end of the three weeks, if the lender has decided against approving your loan, they’ll write a letter releasing you from the contract. With this letter, you’ll be able to get your earnest money back.
“How soon is the earnest money due?”
Ordinarily, I’ll write a five- to a seven-day deadline. More competitive offers will probably require a quicker payment; this could be anywhere from one to three days.
The method by which you pay the earnest money can be a personal check, a wire transfer, or cashier’s check.
If you have any questions regarding earnest money or any other question related to real estate, please get in touch with me. I’d love to help however I can!
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