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Realogics Sotheby’s International Realty

10237 Main Street

Bellevue, WA 98004

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It’s time to purchase a home and the real estate market is humming! In this hyper-competitive reality, there are many times when multiple buyers will be competing for the same home. This could be a result of supply and demand, high-interest rates, or even the stock market. Writing a strong offer that gets you noticed can be telling, but with the right game plan, it can be the most important strategy for securing the deal and being rewarded with your new house keys! Here are five ways, you as the buyer, can make your offer stand out.


 

Putting Down a Large Earnest Money Deposit


If you want to show you are a buyer of good faith, putting a higher earnest money deposit into your offer can help prove that. In preparation, you should secure this cash before making an offer as this is the first initial payment you will make once your offer gets accepted. You can expect to deposit 1% to 3% of the purchase price into escrow, however, this amount may vary depending on the location of the home. This money will be directly applied towards your down payment or closing costs at closing.

 

Earnest money can often be mistaken for a down payment in the eyes of a first-time home buyer, both are important and closely connected, but the big difference is the promise behind it. Earnest money is a promise to the seller showing your sincerity in your offer and the down payment is a promise to your mortgage lender proving security in the loan they are providing. Like most deposits, this chunk of cash is refundable. As a buyer, knowing your money is protected is especially important. In the case of a low appraisal, results of an inspection, inadequate financing, and many more reasons you can expect a full refund. In the bigger picture, putting down a larger earnest deposit doesn’t cost you a dime more while giving the seller the impression that you’re committed and stable.

 

If you are capped out at a certain dollar amount for your deposit, you can still show you are serious about the home to the seller by making your earnest money non-refundable. This could be a costly risk, so always discuss it with your real estate broker before adding this to your offer.


 

Providing a Preapproval Letter


Being a prequalified buyer is a crucial element for a seller when deciding on a winner. If you are a cash buyer you will need to provide proof of funds, but when financing a home your mortgage lender should provide a preapproval letter for every offer you make. This is an official document stating how much a buyer will be able to borrow to purchase the home. An experienced lender will highly recommend having a buyer’s file go through Underwriting which takes place when income, assets, and debts are accounted for to finalize the loan. This is not only taking the risk away from the bank but will also make the whole process faster once you reach mutual acceptance on a sale. When an offer is submitted to the sellers it’s a good idea to have your lender call the selling broker to verify the buyer’s Preapproval letter or Underwriter Approval Letter and financial status, thus proving you can afford to purchase the home. A solid offer will always start with this important record.

 

Make sure to look for the following qualities when choosing a mortgage lender. Local knowledge will be invaluable as they understand the current market of your area. A proven track record of success is very important in a fast-paced industry, so working with a highly recommended lender is going to give you an advantage. There are many rates and fees to be educated on so choosing a lender who is honest and upfront will help when understanding the financing part of the purchase. Most importantly, a good lender will be a problem solver if an issue arises and allow you to close on time.

 

 

Large Down Payment


A close second to an all-cash buyer is a buyer putting down a large down payment. This is part of the home’s purchase price a buyer will pay upfront, typically at least 6% of the borrower’s loan value. A higher down payment means less risk for the lender while making the seller feel more confident. While a 20% down payment is also common but not always necessary, there are several benefits to putting more money down. The more money you put down, the smaller the loan, which will also

minimize total interest costs - lowering monthly payments. When trying to outbid other buyers on a home sellers will consider all aspects of the offer. A common reason a sale fails in this business is financing. While it is easier to get a loan when providing that sum of cash, it is not always as reachable for some. If your loan is conventional a buyer can receive “gift funds” from family and even friends. This is money received in


 addition to the buyer’s normal income. There are no limits on the number amount of gift funds and for a single-family home, a buyer may use this money for the entire purchase price as well as closing costs. FHA (Federal Housing Administration) loans are trickier, a bit more stringent, and require all gift funds to come directly from a family member. There are other ways to gather cash to increase your down payment. Do your research on down payment assistance and first-time home buyer programs. The down payment is the biggest closing cost of all. The bigger the number the more impressed the seller will be.

 

 

Waive Contingencies or Compromise to Benefit the Seller


In multiple offer circumstances you may be advised to waive some or in other cases all contingencies in your offer to purchase. In the real estate world, a contingency refers to a clause in the purchase agreement specifying an action or requirement that must be met for the transaction to close. The four most common contingencies are inspection, appraisal, financing, and home sale. When waiving these, this will reduce the seller’s risk and speed up the agreement. Offering a quick close or rent back depending on the seller’s timeline can also sweeten the deal. Communication is key when preparing an offer. Getting feedback as to why they are selling or if they already bought a new property will help in deciding what to waive. Sellers can be more cautious when reviewing offers that include many contingencies, they want to see fewer opportunities for a buyer to exit the sale. If you don’t want your offer to end up at the bottom of the bunch tighten your deadlines.

 

 

Work With a Reputable Broker

 

Selecting a well-connected and distinguished broker within the industry to work with has many comforting benefits. Not only will you be given expert advice in this active market, but a great broker can help find properties the moment they are listed, or in some cases, just before hitting the market. This can ensure your offer is at the top of the stack. When competing against multiple offers having an experienced and established broker on your side will also help strengthen your offer. This will ease the selling agent’s mind that the transaction will run smoothly and that the buyer is in good hands. A broker with a trustworthy and hardworking reputation will go a long way towards getting your offer accepted. Credible referrals from your network are a powerful tool when selecting a real estate broker. Communication, knowledge, negotiation skills, and integrity will set them apart.


Today’s housing market makes it even more important to provide a strong offer on a home. Sellers are expecting offers from each buyer with their most competitive terms. No matter how aggressive the competition is, all hope is not lost, and following these tips should help provide a powerful attraction to your offer compared to others. Every situation can be different, but these are just a few of the ways in which you can make your offer stand out. The home buying process can be discouraging at times in the event your offer is not selected but try not to feel emotionally attached to each home you make an offer on. Fighting multiple offers on your dream home can be challenging, but by following these few guidelines, you are giving yourself the best opportunity at being the owner of a new home.

 

Whether you are a first-time home buyer or an owner of many properties ready to invest in more, hiring a professional will only benefit you. With every unique situation, Emily Roberts and Realogics Sotheby’s International Realty will help guide you while providing first-class client care.

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