When you submit an offer to a seller, there are several key things they look at. Here are the things that will take your offer from good to great.
1. Net Profit
Obviously, the first thing a seller will look at is the price you are offering for their house. They also consider how much seller's assist you are asking for, since that means they will net less profit from the deal. In a seller's eyes, the best offer is one at or above asking price, with no seller assist.
2. Deposit
Sellers like to see a larger deposit, because it means you are a serious buyer. They don't want to take their home off the market for a few weeks just to have you walk away from the deal. If you only give a deposit of $500, walking away from the deal wouldn't be that painful for you. However, if your deposit is $5,000, that would be a pretty big chunk of money to forfeit if you walked away. A bigger deposit is more security for the seller that the deal will actually go through.
3. Settlement Date
Your selected settlement date usually has to do with what kind of financing you're getting. A seller wants to sell as quick as possible. Allow enough time for your mortgage, but don't delay settlement if at all possible.
4. Financing
The best possible type of financing is CASH! Why? No appraisal, quick settlement, and very few hoops to jump through. Financing with a conventional mortgage is probably a seller's #2 option, since settlement can happen in 30 or so days and the appraisal is more forgiving than other options. An FHA or USDA mortgage usually takes longer to get to settlement (45-60 days) and also there are more strict guidelines (ie. well and septic system have to be a certain distance from each other, house has to be in better shape to pass appraisal, etc.). Also, more often than not, these two types of mortgages require certain inspections (like a wood destroying insect test and a water test).
5. Inspections
More inspections = more potential for the deal to fall through; greater chance the seller will have to make repairs or negotiate a lower purchase price; and bigger headache for the seller. The ideal offer will have no inspections elected.
6. Other Contingencies
From a seller's perspective, the less contingencies, the better. Do you have to sell your current home in order for this deal to go through? If you have a home sale contingency, the seller may be turned off from your offer. Another contingency is the appraisal contingency, where the buyer says "if this house doesn't appraise for the purchase price, I can walk away from the deal." Keep contingencies minimal to give yourself the best offer possible.
As a buyer, it is important to think about things from a seller's perspective. Sellers want to sell their home as quickly as possible, for as much money as possible, while avoiding as many headaches as possible! Keep this in mind when you are making your offer.
Comments