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The real estate market is tough right now. I know what you’re thinking: “Tell me something I don’t know, Liz!”

OK, I will. The market’s tough, but not impossible to crack. And a lot of your success will depend on your offer.

I’ve seen and written a lot of offers, both as a buyer’s agent and a listing agent. So I know how to stand out – and it really comes down to knowing your seller, customizing your offer, and thinking outside the box.

Without further ado, here are five ways to make a competitive offer that will get accepted.

What's in this Article?

Find creative ways to compete with cash
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Work with a real estate agent and lender who are savvy to this market
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Offer more than what cash buyers are offering
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Include an escalation clause
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Find out what the seller cares about most
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Find creative ways to compete with cash

Lots of homebuyers find it difficult to compete with cash offers, especially if they are first-time homebuyers or they need to sell their current home before they can purchase a new one.

But there are ways around this.

There are companies out there that will back your offer with cash, meaning that they will guarantee the purchase even if your mortgage financing falls through. Some will also purchase the house with cash, then sell it to you. In those instances, you can use a mortgage loan to buy the house from the third-party company.

Not all of these companies operate in all areas, so talk to your real estate agent about lenders or homebuying companies that offer cash guarantees.

Learn more: How To Make a Cash Offer on a House – Even When You Don’t Have Cash

Why backing your offer with cash can help it get accepted

A cash-backed offer is attractive to sellers because it provides some reassurance that the sale will close and that they won’t have to relist their home.

That’s a big deal because they may need the cash to purchase their next home or they may have bought a new place already and are on a tight moving timeline.

Additionally, the longer a house sits on the market, the less desirable it appears to other buyers. Sellers don’t want to relist their homes if they can help it, since they may not get as many competitive offers the next time around.

Learn more: How Long Should a House Be On the Market?

Work with a real estate agent and lender who are savvy to this market

Your real estate agent is a crucial part of getting an offer accepted. It’s no secret that the housing market is extremely competitive right now. You need to work with an agent and a lender who are adapting to the current conditions and finding ways to help you compete.

Ask your real estate agent what strategies they’ll use to help you stand out:

  • Do they have ideas for creating a compelling offer?
  • Are they willing to get on the phone with the listing agent to learn everything they can about the seller’s priorities?
  • Do they have relationships with lenders they can refer you to who are offering guarantees and products to help you compete?
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If you’re already working with a lender, ask your loan officer similar questions:

  • What are they doing to help you?
  • Will they call up the listing agent and vouch for you as a borrower?
  • Are they offering a cash guarantee to help you compete against cash?

Don’t be afraid to seek out another lender or agent if yours is not proactive about helping you buy a home.

Learn more: The #1 Question You Should Ask When Choosing a Mortgage Lender

Offer more than what cash buyers are offering

Sellers like cash offers because there’s no risk of the buyer’s financing falling through. But cash isn’t always king. That’s because cash buyers often make lower offers than those who are taking out a mortgage.

If you’re comfortable doing so, you might offer more than what cash buyers are offering. Assuming you have a strong preapproval backing your offer, the seller might choose you over the cash buyer if they stand to make significantly more money.

Assuming you have a strong preapproval backing your offer, the seller might choose you over the cash buyer if they stand to make significantly more money.

The caveat here is that lenders won’t let you borrow more than the appraised value on the home. So if you get an offer accepted for $325,000, but the home only appraises for $300,000, your lender will only approve you for up to $300,000.

Then you have to decide whether to make up the $25,000 difference from your savings or walk away from the deal.

This type of “appraisal gap” is quite common in the current market, which is another reason sellers like cash offers. But you can work with your real estate agent to include language in the offer stating that you’ll pay X amount to cover the appraisal gap if there is one.

Again, though, only do this if you’re comfortable with this financially and feel confident in the decision. The drawback to paying more than the appraised value is that if the home doesn’t appreciate significantly by the time you want to sell it, you might not be able to sell it for as much as you paid.

Include an escalation clause

Another way to get your offer accepted is to include an escalation clause. An escalation clause allows you to stay in the game when someone makes a higher offer than what you submitted. This clause automatically increases your offer when a higher offer comes in. You can have the clause escalate in increments, either by a set dollar amount or by a percentage.

Here’s an example of how an escalation clause works:

  1. The house is listed at $300,000.
  2. You offer $315,000 because you’re in a competitive market and you really want this house.
  3. Your offer includes an escalation clause that raises your offer by $2,000 above the highest offer, if the seller receives other offers.
  4. A second buyer submits an offer for $320,000.
  5. Per your escalation clause, your original offer increases to $322,000.
  6. The other buyer offers $325,000.
  7. Your offer increases again, this time to $327,000.
  8. The other buyer withdraws their offer.
  9. The seller accepts your offer at $327,000.

Of course, you’ll want to think carefully about how much you are willing to spend on the house. If there’s a maximum price you won’t go past, that needs to be written into your offer.

Additionally, if your offer is accepted, you’ll be locked into the contract. So you wouldn’t want to put multiple offers in on different homes, and you should be sure you want this particular house.

Learn more: What Is an Escalation Clause in Real Estate?

Find out what the seller cares about most

Another way to get your offer accepted is to do some homework on the seller. Cash might be attractive, but it’s not a universal trump card. Different sellers care about different things, so make sure your agent is calling the listing agent to find out their particular client values.

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Here are some examples of things sellers might care about:

Who is buying the house?

Some sellers care whether an investor or a private individual is buying their home. If they want to ensure that the home goes to a regular buyer who plans to live in the home, your agent can convey something about who you are.

They can’t disclose information about your racial, ethnic, religious, or socioeconomic background, nor whether you have a disability.

But they can share details such as the fact that you’re a first-time homebuyer who loves the property or that you are really excited about the home.

Will you consider a rent-back option?

Sellers are eager to sell their properties, especially if they need the cash to purchase their new homes. But they might be worried about being able to find a new property before your closing.

You may be able to pique their interest by offering a rent-back option, in which they can rent the home from you for a certain period of time after you close. If you offer this, you’ll want to work with your agent to include detailed information about the security deposit and their move-out timeline.

But it can give sellers breathing room, and that could make all the difference to your offer.

@lizbrownrealtordaily #listingagents #listings #listingtips #homesellertips #homeseller #homeselling101 #homeselleradvice #varealtor #wvrealtor #charlottesvillerealtor #wirealtor #exprealty ♬ Monkeys Spinning Monkeys - Kevin MacLeod & Kevin The Monkey

Are you going to ask for repairs?

A seller who doesn’t want to negotiate on home repairs may be wary of an offer with a home inspection contingency. If you’re willing, you might note in the offer that you will have an inspection for informational purposes only and that you won’t ask the seller for repairs.

Or, you might stipulate that you won’t ask for repairs under a certain amount or on particular home systems.

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How much money can they get?

Money talks, especially with an offer. You might include a signing bonus, sometimes referred to as option money, to incentivize the seller. Signing bonuses are non-refundable amounts that the seller receives at closing.

A signing bonus can be especially useful if you’ve found a house you want that is about to be shown at an open house or you know will have multiple offers.

If you submit the offer with an attractive signing bonus but have a deadline for the seller to accept it, that might motivate them to cancel the other showings and go under contract with you.

An alternative to a signing bonus is to make your earnest money deposit non-refundable. Typically, you can get your earnest money deposit back if you cancel your contract during your due diligence period.

But making the earnest money deposit non-refundable sweetens the offer for the seller without requiring you to put even more money into the house upfront.

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The bottom line about getting an offer accepted

Making a winning offer in today’s market depends a lot on knowing the seller – and to know your seller, you need a good real estate agent. You should be working with an agent who will get the inside scoop on your seller, figure out what’s important to them, and who will help you craft an offer that makes them take notice.

Not sure where to find an agent like that? Check out my guide to finding a brilliant agent on real estate TikTok.

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