For the final installment of our blog series on challenges home buyers are facing, we’re tackling the challenge of having to stand out among multiple competitive offers.
It’s likely most REALTORS® in Virginia have encountered the disappointing experience of writing up a strong offer on behalf of a buyer, only to be told that another offer was selected. With inventory as low as it is, how can YOU help your buyers increase their appeal to sellers? Previously, we discussed the option of removing contingencies. Now, we’ve gathered four additional strategies to elevate your buyers’ contracts to the top of the stack.
- Provide Proof of Funds… EARLY!
Given the current state of the market, most offers submitted are likely to include a competitive number. But sellers also have to consider the amount of risk that comes with each option. If a buyer is offering to pay a certain amount above a property’s appraised value or to put down a large down payment, consider submitting proof of funds along with your offer to confirm that your buyer is rock solid. Because most other buyers aren’t likely to include this type of proof so early on, it’s a good way to stand out.
- Call the Listing Agent.
Making a quick phone call to the listing agent to ask about the seller’s priorities might provide you with the insight you need to help align your buyer’s offer with the seller’s unique needs. It isn’t always just about the number—sellers might also desire a very quick closing window, or they might be hoping for a long rent-back period. Virginia REALTORS® General Counsel Laura Farley says, “If the seller hasn’t yet secured a new home, they may be worried about now having to enter this competitive market as a buyer and how long their home search could take. Offering the potential for a longer rent back—and including some flexibility within that offer—could provide a solution.” Sure, the listing agent may choose not to disclose this information, but amid such high competition, it might be worth the phone call.
- Consider a Non-Refundable Deposit.
Instead of having your buyers offer a typical Earnest Money Deposit, if they are able, consider having them offer a deposit that is non-refundable, meaning the sellers will keep the money if your buyers terminate the contract for any reason. With this option, keep in mind that there are a few things to be aware of here in Virginia. For example, if a buyer is utilizing a VA or FHA loan, if they decide to terminate a contract because a property doesn’t appraise, they cannot be penalized. Additionally, Virginia law grants buyers the right to terminate—within a given time frame—if they are in an HOA or a condominium.
- Help Alleviate the Seller’s Headaches.
Consider ways in which your buyer can help make the home sale process less stressful for the seller. Does the seller have a lot to pack? Perhaps your buyer could offer paying a company to pack and/or move the seller’s belongings. If they haven’t yet secured a home, your buyer could offer to pay for several months of storage at a storage facility. Getting creative with your contract’s terms could make a big impact on stressed-out sellers. One word of caution: be SURE to get approval from the lender before offering to provide sellers with a service.
Check out ALL of our stories in the “New Challenges for Buyers” series here: