In 2021, the demand for homes in Walnut Creek CA Real Estate market is near an all-time high. After finally finding your dream home, you discover that several other buyers are interested in the house as well. Here are the top ways to make a competitive offer on the home you desire.
Make a Cash Offer
With a cash offer, the hassle of getting a bank loan and appraisal is eliminated. Cash is king and is the best way to let the seller know you’re serious about buying their house now.
If you’re unable to make a cash offer, getting pre-approved is the first step towards writing a home purchase offer. If a seller has many offers on the table, they will only look at those who are pre-approved. Having a pre-approval letter lets the seller know you are ready, willing, and able to move quickly to complete the transaction.
Make a Competitive Offer
This is especially important in a seller’s market. When receiving multiple offers, sellers will look at those that catch their eye first. Before putting in your offer, consult with your realtor so you can determine the market value of the property. This is accomplished by completing a comparative market analysis (CMA) of the Walnut Creek CA real estate.
A CMA provides an estimate of a home’s value based on similar properties recently sold in the area. The CMA primarily helps sellers set their selling price, but it also helps buyers make competitive offers.
Key criteria for a CMA include the following:
Age of home
Style of home
Homes may sell quickly, so the more competitive the initial offer, the better chance you have of making a deal for the home.
Include Earnest Money In Your Offer
Not to be confused with a security deposit, an earnest money deposit is a “good faith deposit.” This is money put down when making the initial offer on the home. With earnest money, the seller knows immediately you’re serious about purchasing the home. If you rescind your offer, the earnest deposit is forfeited, but if the offer is rejected by the seller, the earnest money is returned to you. If the offer is accepted, the money is applied to the home purchase price. Typical earnest deposits range from 1% to 10% of the sale price.
Limit the Number of Contingencies
Contingencies are used to protect buyers from issues concerning the home’s systems, structure, and other aspects of the home. The most common contingency is a home inspection, which tend to include the following:
Permits and zoning
Radon or methane gas
Sewer and septic system
Plumbing and water systems
Pests and termites
Basement and foundation
Heating and air conditioning
Easements and encroachments
Other contingencies can include the sale of the buyer’s current property (if applicable) or financing.
Sellers who want to move fast tend to dislike contingencies because they can slow down the selling process (and lower the value of the home) if additional inspections or repairs are required. Contingencies are used to protect the buyer but can be removed by their discretion. Most realtors will advise against removing contingencies but offers with the fewest contingencies tend to be the most attractive. According to the National Association of Realtors, “removing restrictions related to the sale of a current home and being flexible with things like the move-in date can make an offer stand out to a seller.”
Have a Flexible Closing Date
As just mentioned, being flexible on the closing date could work out in the seller’s benefit: it gives them time to complete repairs and get things in order. Hard deadlines may be a challenge in some instances and could cause an offer to be rejected.
Create an Escalation Clause
Many homes will receive multiple offers. An option for an eager buyer is to include an escalation clause. With an escalation clause, the buyer tells the realtor to automatically increase the offering price if the seller receives a higher offer: “I will pay x price for this home, but if the seller receives an offer higher than mine, I authorize increasing my offering price to y.” Care should be taken to ensure not offering more than what the house is worth. Keeping emotions in check is key. In addition, make sure the seller doesn’t see the escalation clause as they see the original offering price.
This is similar to a counteroffer but is implemented without having to get the buyer’s approval to increase the offering price.
Make a Connection With the Seller
When applying for a job, many applicants will include a personalized cover letter to connect with the employer. The same philosophy applies to buying a home. Send a letter to the seller along with your offer explaining why you like their home so much. In many instances, the seller will have fond memories of their home and may want others to appreciate it as much as they did.
Putting It All Together
As housing prices rise, it’s critical you have a strategy to stand out from the sea of other buyers out there. By creating a plan and implementing it, you could be one step closer to closing on your dream home.
Are you looking to buy or sell your property in East Bay? Need help with your open house? Here at Range Homes we have a team of motivated agents who are here to put your needs first. Our mission is to get you the best deals & offers, and help you buy (or sell) your dream home. For assistance with your Walnut Creek CA real estate transactions during these challenging times, Range Homes is here to help. Reach out to our team today by clicking HERE.