How do you get an offer accepted on a house in a competitive real estate market? It’s the number one question for homebuyers competing against other offers. Real estate agents scramble to figure out how to win against multiple offers and get their clients that dream home. The pressure builds when housing inventory levels are low.

How can you compete in a hot seller’s market?

It may be tough, but with some inside information, it is possible.

To help you out, we’ve compiled some tips for getting sellers to accept your offer, even in a multiple-offer situation. We’ll cover what to include when you make the offer, as well as strategies for making your offer stand out.

These tips will make buying a house seem like a reachable goal rather than an impossible dream.

These tips, and our advice in general, is based on experience with our clients. Every buyer, their financing situation, and their risk tolerance is unique. So please don’t take any of this as legal advice and always seek legal counsel on your end to make sure you’re taking risks that are acceptable to your situation.

Use a Trustworthy And Experienced Realtor

Navigating a hot market like Hilton Head Island and Bluffton, South Carolina, and the surrounding Lowcountry is no easy task. The real estate landscape is constantly changing so you’ll need someone with boots-on-the-ground knowledge to help guide you through.

Working with a trustworthy, experienced real estate agent is a no-brainer if you’re looking to buy a house. You’ll get access to all the industry knowledge and experience as well as updates on houses coming on line in your area, all for free.

Because the seller (not the buyer) pays real estate agent commissions, you have nothing to lose by adding an agent to your home buying team.

Be The First To View And Submit An Offer

Some sellers want to avoid a bunch of contracts to work through. If you’re the first buyer to submit an offer, you may entice the seller to accept your contract.

To be the first buyer you’ll need an aggressive realtor to schedule within minutes. You and your realtor must be on a “saved search” to notify you of new listings. Once you see a promising new property you must stop everything and schedule a viewing immediately.

Offer Above The Asking Price

A sure way to make your offer stand out is to write it slightly above the asking price. While this may sting a little, over the life of a 30 year mortgage, the extra amount you pay to get your dream house won’t matter too much in the grand scheme of things.

How much over asking should you go? Your realtor should be able to advise you on this one. It will depend on the competition for that particular house, as well as the supply of similar homes in the area.

The additional amount should be enough to tempt the seller, but not so much that you go beyond your home buying budget or that the price is well beyond the value of the home.

Add An Escalation Clause To Your Offer

Even if you’re not buying your home at auction, adding an escalation clause will let you win a bidding war among other buyers as if you were. An escalation clause will automatically raise your offer a set amount if another buyer comes in with a higher offer.

To illustrate, let’s say your original offer on a home was $400,000 and you added an escalation clause that will raise the price by $2000. If another person offers $405,000 the escalation clause would raise your offer to $407,000. 

Escalation offers should also include price caps. In the previous example, you might include a price cap at $415,000 to prevent the escalation from driving the price beyond your desired budget.

While this is a great strategy to make sure you get the house you want, you will get no bargains with this method. In fact, you could end up paying more than the home is worth, which is dangerous territory in the event of a decrease in real estate prices.

Offer More Earnest Money

Earnest money is offered with a sales contract to help the seller justify taking their house off the market. It proves the buyer “earnestly” wants to purchase the property beyond the contract alone. Different states have different terms for earnest money deposits, but it’s typically between 1% to 2% of the sales price, however, you can make your offer more compelling by putting down as high as 10%.

You can also make your earnest money “go hard.” This term means you will waive all contingencies to retrieve your earnest money if the deal does not close. This tactic shows serious intent to buy, pushing your offer above others that are less serious

Make A Cash Offer, If You Can

Not everyone can pay for a house with cash. But if you can, you may have a leg up on other non-cash offers. This lets the seller know that your offer is not contingent on receiving loan approval.

Cash offers have become increasingly popular; more that 20% of all home sales were paid with cash in 2022.

Use A Reputable Local Mortgage Lender

One of the first things listing agents do is verify the mortgage lender and pre-approval letter (in a non-cash deal). If the listing agent is a high producer they will know many local lenders. Some lenders have bad reputations for sabotaging deals. If you use one of those lenders, the listing agent will likely share that information with their sellers.

Ask your real real estate agent for advice on the best lenders to use to get your offer accepted. The point is even more critical in smaller cities when making an offer. Real estate professionals tend to notice each other more frequently in smaller towns. Your mortgage broker’s experience and reputation can substantially impact your contract’s strength.

Offer A Higher Down Payment

The larger your down payment the more it can show sellers that you’re able to afford the home and the deal will close smoothly. It also means that you’ll need to finance less of the purchase with a mortgage, and as you’ll need a smaller loan, it will be easier to qualify.

Buyers putting more cash down have more money in the bank to access. Low appraisal value or expensive repair costs are less likely to derail a deal if the buyer has more cash.

Minimize (But Don’t Waive) Your Inspections

In today’s market many buyers are limiting their inspections to convey the message to sellers that they will not nitpick on smaller, cosmetic type items.

We’re typically seeing these limited inspections clauses in two formats:

  • One way is to write a clause that says the buyer will only ask for repairs or concessions if they find issues in the home related to health, safety, or structural items

  • The second way we’re seeing is to add a clause that says they’ll accept the property “as is.” More specifically, it says if they accept the property, then they will waive their right to ask for any repairs or concessions. (This is basically saying they will inspect and make a “go/no-go” decision.) We like this second option if you are trying to make your option to be as appealing as possible to the seller.

Of course, some buyers will fully waive the inspection contingency. While it’s risky, it can be an effective tool to get a seller’s attention and get an offer accepted in a seller’s market.

If a buyer decides to go this route, they must make sure they have enough cash to fix any major issues or cover any difference between the offer and appraised value of the home.

Close On Their Terms

Every seller has different circumstances that motivate them to sell. For example, one seller may sell their primary residence through a relocation company, while another may sell an investment property. Both of these sellers will have different terms that are appealing to them.

Having your real estate agent contact the listing agent before submitting your offer is wise. Your agent can ask the seller’s agent precisely what their client wants in a contract. If your agent can get this information, you can tailor your offer to the most appealing terms for the seller. This method will always put your bid at the top of the list.

Offer A Leaseback

There is a delicate balance between selling your old home and buying a new one, and it's all too easy for buyers and sellers to step on each other’s toes. One way to streamline the process (and make your offer more appealing) is to offer the seller a leaseback option.

A leaseback allows the seller to lease the home they’re selling from you for a set time period while they locate another place to live. This is a great incentive if you’re not in a hurry to move into your new home.

As with any lease, it’s important to talk with your real estate agent (and probably a lawyer) to make sure you get all the details in writing to avoid any complications.

Offer To Pay The Seller Moving Expenses

Consider offering a monetary amount to help pay the seller’s moving expenses. This is a unique strategy that is rare, which makes it more attractive.

The higher the contract rises above the listing price, the more likely the transaction will experience appraisal and value issues. When you offer money for moving expenses, the seller gains the financial benefits without adding to the home's sales price. This strategy can ease the appraisal and mortgage process (with respect to value issues) and make your offer extremely appealing to a seller.

Accept The Seller’s Desired Inclusions/Exclusions

Does the seller want to keep the curtains and basement freezer? Let them have them. Structure your offer to let the seller keep whatever they want to keep. For example, if they want to keep the washer and dryer, let them do so and just take that into account on your offer price.

Asking the seller for things they want only puts you at a disadvantage compared to other offers. It may seem small, but it could make a difference.

No Personal Letters

If you read through other articles about making offers, you’ll see suggestions for writing personal letters to the sellers. Unfortunately, that ship has sailed and many listing agents see them as problematic. This practice ended up causing fair housing lawsuits. The buyers would assume the seller rejected their contract due to race and social class.

Once the lawsuits started popping up nationwide, agents were advised by the National Association of Realtors (NAR) to avoid these letters. Attaching a personal letter to your offer creates extra tension for the listing agent (most will not even present a personal letter) which will not help you at all in the long run.

Be Flexible

Don’t forget that you’re not just buying a piece of property, you’re working with people to come to a mutually agreeable deal.

Every seller has different needs. If you are in a position to move fast and meet their requests, you can beat other competing buyers.

If you’re willing to close after the school year ends, forgo any requests for repairs, or divvy up closing costs in a non-traditional way, you stand a better chance of getting your offer accepted.

Being flexible is one way to stand out as someone a seller wants to work with.

Wrapping Up

If you follow our 15 suggestions in your offer and still lose, you should have confidence that you gave it your all. Sometimes you’re up against an all-cash offer or a buyer who is willing to overpay versus market value. If that’s the case, you don’t want to “win” that competition anyway, because in the long run that’s a poor investment.

Focus on what you can control and have peace of mind knowing you gave it your best shot. If you take into consideration the tips in this article you’ll probably end up getting a home fairly quickly, even in a tough market!

If you’re looking to purchase a home in the Bluffton, Hilton Head, and surrounding Lowcountry area, you know how quickly homes can pop up and disappear on the market.

To simplify the homebuying process, it is essential to work with a realtor that will represent your interests.

To find a trustworthy and reliable real estate agent look no further than the Cobb Group, Bluffton, South Carolina.

Posted by The Cobb Group on
Email Send a link to post via Email

Leave A Comment

Please note that your email address is kept private upon posting.