You've seen dozens of homes and finally found one that you love enough to put an offer on. Your next step is to draft an offer that the sellers would find very hard to reject. So, what exactly goes into crafting a solid offer that will entice the sellers to choose you over other potentially interested buyers?
Understand the Seller's Motivations
Finding out the scoop on the motivations behind why the sellers want or need to move can help you more appropriately craft your offer. For instance, many sellers are often motivated because of a need to relocate as a result of a new job or to send their kids to a new school in a different district.
In cases like these, sellers may be motivated by time, which means they probably want to sell quickly. If that's the case, being flexible on the closing date and offering to close the deal according to their preferences can make your offer much more attractive in their eyes.
While you likely won't be able to find out what the seller's motivations are yourself, your real estate agent may be able to do a little digging and get as much information from the listing agent as possible. It's not recommended for buyers to contact sellers directly; instead, communication should only go through the representing agents.
Develop a Rapport With the Seller
If the market you're in is particularly competitive and there are many other buyers eyeing the same property, it might be worthwhile to make the effort to establish some sort of connection with the seller. Homeowners are typically emotionally attached to their homes, especially if they've lived there a long time and have started families there.
As such, sellers may be more likely to sell to a buyer who has shown an emotional connection to the home as opposed to a buyer who is belligerent or contentious throughout the negotiation or bidding process.
Write the Sellers a Love Letter
This follows a similar premise as developing a rapport with the seller and can go a long way in showing them that you truly appreciate the home and want to develop the same type of connection.
If you have absolutely fallen in love with the home, write a letter to the seller expressing these emotions. While it might sound corny at first, you'd be surprised at how powerful this tactic can be, especially when you're competing with other interested buyers.
Offer Exactly What the Home is Worth
There's no room for lowballing if you're trying to impress the seller with a killer offer. While you don't necessarily have to offer the full asking price, you might want to consider doing so if the listing price is at or near market value.
Make sure to give your real estate agent the chance to study other similar homes in the immediate vicinity that have sold in the recent past. These "comps" are valuable tools that are used to come up with an accurate and fair offer price. Knowing what other similar homes sold for can help you come up with a sound offer price that the seller should appreciate.
Keep the Conditions to a Minimum
Sellers won't be too impressed if your offer is full of clauses that make the offer conditional on a number of factors that can drag out the process. The majority of sellers prefer not to bother with too many conditions and would rather work with a "clean" offer instead.
Of course, that doesn't mean you shouldn't include the typical home inspection and financing clauses (as well as a Status Certificate condition if you're buying a condo). These clauses are essential and protect you in the event that there's something significantly wrong with the home or you're unable to secure a mortgage. That said, sellers tend to look more favourably on offers that come with the least number of contingencies.
Include a Hefty Deposit Cheque
Every offer includes a deposit amount, which is an amount of money you offer the seller that shows your good faith in the transaction. Usually, this amount is around 3-5% or more, but it's usually in the upper limits in hot markets.
While a high deposit amount is very attractive to sellers, it's even more appealing if a certified cheque is submitted along with the offer. This is especially helpful if you find yourself in a multiple offer situation.
In this case, your offer will stand out from others that have not been accompanied by a deposit check. That said, it's important to make sure there are provisions in the contact that stipulate how you can get that deposit money back if the deal falls through.
The Bottom Line
If you're serious about making your offer stand out from the crowd, be sure to take the time to carefully draft your contract. Assess how badly you want the home in question and how much you're willing to offer to make it hard for the sellers to refuse it. Just be sure not to go beyond what you're comfortable with so that everyone comes out a winner when all is said and done.