9 Ways To Make Your Home Offer Irresistible

You’ve found a home you can afford, in a great neighborhood with good schools. It even has a fenced-in yard for your dog. What could go wrong?

Any number of things, ranging from a competing buyer’s all-cash offer to an insufficient earnest money deposit from you. In markets with houses in short supply, sellers have the advantage over buyers, and bidding wars often erupt between buyers vying for the nicest properties. Your purchase offer should persuade sellers that you are a serious contender who will give them most of what they want, even as it protects your interests.

1. Pay cash. Investors have been snapping up homes to flip or rent, and they usually come to the table with cash. Sellers love all-cash offers because they’re less likely to fall through before the sale closes. In January, all-cash transactions accounted for 28% of existing home sales, according to the National Association of Realtors. Cities currently attracting strong investor interest include Atlanta, Detroit, Las Vegas and Phoenix, reports CoreLogic. If you need a mortgage, a low appraisal could cause your bank to back out of the deal, forcing the sellers to put the house back on the market.

2. Get preapproved. If you can’t pay cash, you’ll need to get a mortgage. Three or four months before you shop for a home, check your credit reports, says Michael Corbett, a consultant to real estate Web site Trulia and author of “Before You Buy!” That will give you time to dispute any errors and take short-term steps, such as paying off debts, that will improve your credit score. You can get your reports once a year free from the three major credit bureaus at http://www.annualcreditreport.com. Then get a bank’s preapproval. It won’t guarantee that you’ll get a loan, but it will show sellers that a lender has verified your income and credit score and determined that you can afford payments on a mortgage for a certain amount.

3. Make your best offer on price. You may only have one shot to get it right, so make your best offer — what you’re willing and able to pay. Base your offer on recent sale prices of com­parable properties in the neighborhood so that it will pass muster when the property is appraised. If you hold back, thinking you’ll sweeten the offer on the second try, you may lose the property to another buyer.

4. Up the ante. You can add an escalator clause, with which you agree to ratchet up your offer if there’s a higher bid from another buyer. Keep in mind that if you agree to pay more than the market value determined by an appraisal, you’re on the hook for the difference from your own funds.

5. Beef up your earnest money. This deposit signals how serious a buyer you are. Try doubling the amount that the seller requests or that is customary in the area. If you must renege on the offer for any reason allowed by the contract or state law, you’ll get your money back.

6. Pay for extras yourself. These might include some of the closing costs, homeowners association dues that must be prepaid, a one-time contribution to a community-enhancement fund, or a home warranty.

7. Make contingencies palatable. Most sellers prefer offers with no contingencies, but you probably can’t afford to forgo the protection that contingencies provide if you want to cancel the contract. Offset a financing contingency with preapproval and a strong earnest money deposit. If you have enough cash, temper an appraisal contingency by assuring sellers that if the appraisal comes in lower than the purchase price, you’ll pay the difference or split it with them (up to a certain amount). Include a home-inspection contingency, but tell sellers that you will cover the cost of any repairs. If the price tag on those repairs gets out of hand, you can back out of the deal.

8. Write a love letter to the sellers. Re/Max agent Gayle Henderson, of Scottsdale, Ariz., says this will help you connect with the sellers, especially if you haven’t met them. She suggests such points as: “We’re relocating from…” “We see ourselves living in your neighborhood or chose your schools because …” “We especially love …” and “We appreciate your accommodating our visits.”

9. Give the gift of time. Express your willingness to work with the sellers’ timetable to go to closing. If the sellers want to remain in the home for a while after closing, offer them a “lease back” or “rent back,” which means that you will be their temporary landlord. This is a legal arrangement, and you’ll need to work out the details with your agents and be sure that the sellers keep their homeowners insurance during their stay. If you are bidding on a short sale, make clear to the sellers that you are patient and can wait for the bank’s decision

What You Need to Know About Buying a Home During the Holiday Season

If you’re house hunting over the holidays, you’re likely a serious buyer with an immediate need.  Perhaps you have to relocate for a new job opportunity, or there’s been a change in your personal life? 

Regardless, while you may assume it’s not an ideal time to be looking — namely because there isn’t much to look at — there are some advantages to buying this time of year.

Less competition

Let’s start with the obvious one: less competition. This lowers the chances of multiple offers and bidding wars (something we saw a lot of last spring/summer), and should translate into a bigger discount for you. Know your market! This is where sites like Zillow come in handy. Start your research here for comps in your area and to see what homes are selling for.

Serious home sellers

Why would sellers pick such an inconvenient time — while everyone is busy entertaining family and friends and enjoying the spirit of the holidays — to list their properties? Probably because they need to sell and may feel compelled to do so before the end of the year for tax purposes. What this means for you: less hassle when it comes to negotiating; a greater willingness, on the part of the seller, to agree to concessions; less chance of the seller waffling; and greater respect for your offer, even if it’s a little lower than the seller was perhaps expecting.

Faster mortgage approval

Lenders aren’t as busy this time of year, and less volume could mean faster approval. Some lenders might even be willing to reduce fees during the off-peak season in hopes of gaining your business. Regardless, don’t just go with the first lender who comes along. It pays to shop around. Get multiple quotes and check out lender reviews on Zillow Mortgage Marketplace.

Greater affordability

Sure, home prices have been rising, but they’re typically lower in December than during any other month (so you don’t have to be as aggressive with your initial first offer, compared with buying during peak to high season). Zillow’s third quarter Real Estate Market Reports showed home value appreciation slowing. As we enter the slower home shopping season many overheated markets are moving away from bubble brink and ultimately becoming more affordable than they have been historically. If you want to take advantage of low interest rates, the time to act is now.

Pending Home Sales Fall In October

Contracts to buy previously owned U.S. homes fell for a fifth straight month in October, hitting a 10-month low and adding to signs of cooling in the housing market.

The National Association of Realtors said on Monday its Pending Home Sales Index, based on contracts signed last month, slipped 0.6 percent to 102.1, the lowest level since last December.

Contracts were 1.6 percent below last October’s levels.

Economists polled by Reuters had expected signed contracts, which become sales after a month or two, to rise 1.3 percent.

The Realtors group said a 16-day partial shutdown of the federal government last month had sidelined some potential buyers.

“In a survey, 17 percent of realtors reported delays in October, mostly from waiting for IRS income verification for mortgage approval,” said NAR chief economist Lawrence Yun in a statement.

The report was the latest indication of a moderation in the housing market recovery. A report from the Realtors group last week showed home resales also fell in October.

Sales have been dampened by a rise in mortgage rates.