In a fast paced real estate market, with multiple offers, you might want to get creative in making a more attractive bid. Although offering a higher purchase price could increase your chances of going under contract, that means paying more for the property. Focusing on and adjusting other conditions in the contract may be just what it takes.
- Financing. Cash is King. Many homebuyers purchase pursuant to a mortgage contingency, where the lender must approve both the credit worthiness of the buyer(s) as well as the appraisal value of the home. If either one of these contingencies aren’t met, the closing may be cancelled. A cash offer removes those contingencies. However, a cash offer requires actually having the cash available to close, and many first-time homebuyers are unable to buy without financing.
- Closing Date. This can swing both ways, some sellers may want to close as soon as possible, and others may need additional time to close, for whatever reason(s). Real estate agents could discuss the seller’s intentions before putting an offer in, and the buyer can adjust their offer accordingly. Additionally, if closing needs to take place sooner, the parties may be able to negotiate a post-possession closing period, where the seller is permitted to stay beyond closing.
- “AS-IS Condition” and/or Waiver of Professional Inspection. If you are using the Multi-Board 7.0 Contract, paragraph 36 can be selected if you are willing to take the property ‘as-is’. It doesn’t mean that you can’t conduct an inspection and a buyer is still permitted to cancel the contract if the condition of the property is unacceptable following the inspection. If purchasing with financing (mortgage), certain lenders or financing programs may be harder to obtain if the property is being sold “AS-IS”.
- Increasing the Earnest Money. Earnest money, usually held by a third-party or one of the parties Agents/Attorneys, can be increased to show additional ‘earnestness’ to follow through with the purchase. It doesn’t mean the seller is permitted to keep the earnest money if the contract is rightfully cancelled by either party, but it is held and can be used to cover potential damages from a wrongful termination of the contract by the buyer.
- Expediting the Attorney Review Period. This isn’t one that will help your offer get initially accepted, but it may help prevent the seller from backing out during the attorney review. If an attorney review period is extended and extended, it may give pause to the seller to re-think the contract and the buyer’s willingness to purchase the property. Asking for too many repairs, credits, or other assurances may also give a seller concern, and they may opt to cancel the contract. Having the right attorney to assist you in this process can make a huge difference.
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