What's Up Wednesday- August 26, 2020
We've been talking a lot about how buyers are competing for hot properties. This often leads to multiple offer situations where buyers need to make sure their offer stands out from the crowd. Here are three things you can do to write a winning offer.
1. Include an Escalation Addendum.
A contract with an escalation addendum has an offer price, plus an agreement to pay a certain amount of money above that if another offer is higher. For example, let's say you offer $350,000 for a home and include an escalation addendum that you will beat any other higher offer by $1,500 with a max purchase price not to exceed $365,000. An escalation addendum provides you the opportunity to win over higher offers, without paying your max price unless you really have to.
2. Offer the Seller a No-Cost Rent Back.
With a no-cost rent back, you are agreeing to allow the seller to continue living in the house after closing for a set amount of time free of charge. If a house is currently occupied by the seller, this can be a very attractive incentive to give them time to move into their new home. Generally speaking, lenders will allow a seller rent back after closing up to 60 days.
3. Waive or Shorten Contingencies.
When a seller is considering offers the biggest factor they consider, after price, is the likelihood of the buyer actually going through with closing. Contingencies allow opportunities for a buyer to cancel the contract, so the more buttoned-up the contingencies are, the more attractive the offer will be to the seller. That said, contingencies do offer buyers important protections, so we will always review the contingencies with our buyer clients in detail to make sure that they are completely comfortable with the terms they are offering.
If you are looking for guidance on how to be a successful buyer in this market, please reach out for a Home Buyer Consultation with one of our expert Residential Specialists.
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