Unlike Vito Corleone, you are unlikely to make an offer to a home seller that can’t be refused. There are limits after all.
That does not mean, however, that you can’t improve your offer, and in some cases with something other than more cash. Of course more cash plays a dominant role, but there are other steps you might consider that could tip the decision in your favor.
The folks at real estate website Trulia suggest eight things you can use to improve your chances of getting the home you want.
- Get your mortgage loan pre-approved before making the offer. This lets the seller know that the financing is solid. Even better, according to Trulia, is having the lender pre-underwrite the loan, essentially making you an all-cash buyer.
- Do not start with a lowball offer. Haggling will get you nowhere if the house you want is priced in line with comparable sales and listings in the area.
- Reduce your contingencies. If you are pre-approved for a mortgage and are confident that you can get your hands on a bit more cash, you could waive the financing contingency. The risk here is that the appraisal may come in lower than you expect, in which case you will need to have the extra cash. You could also waive the inspection, but that is really risky. Shortening the inspection period, if you can do it, is a sensible alternative.
- Add an escalation clause. Figure out how much you are really willing to pay (if anything) above the asking price. Then add a clause to the contract that automatically bumps up your bid in small increments until that price is met.
- Offer to pay closing costs or home warranties. In an especially hot market, offering to pay closing costs may seal the deal for you. And dropping a home warranty requirement also puts more cash in the seller’s pocket.
- Write a letter to the seller. Let the sellers know that you will love the home just as much as they did and that you’ll take good care of it. It can’t hurt.
- Be creative. This could be something as simple as taking a particularly nice photo of the home when the light is hitting it just right. This won’t replace a few thousand in cold, hard cash, but if the difference in two offers is small, it might keep you in the game.
- Do not overbid. Even if your bid is not accepted you might get a second chance at the home if the higher bidder backs out for some reason. While the house may be just what you want, chances are there are others that are equally acceptable.
More details and suggestions are available at the Trulia website.