Just think - I have just called you to tell you that you have won the house when the seller had multiple offers on the table. Exciting, right!? Of course. Now, if you wrote in an escalation contingency that escalated your sales price over another, you are given proof of escalation by receiving a copy of the offer with the price that escalated yours. Unfortunately, that can have emotions turn when you see how much better your contract is over this competing offer. But remember, you had to be the best to win. Here are a few topics that we strategize around to make sure you can formulate a winning offer that still works within your comfort zone.
Price
Obviously, money talks. And if you want your offer to catch the seller's attention, putting your offer above the list price is a solid place to start. The most effective way to create a competitive offer based on sale price is often seen in a document called an escalation addendum. This basically says "Hey seller, I see your offer of X and I raise it by Y until I get to my maximum sales price of Z". You agree to increase your sales price by set increments over the next highest offer and can include a cap of a maximum negotiable sales price. If you go the route of escalating price, make sure to keep in constant contact with your lender to ensure you are staying within reasonable purchasing power.
Contingencies
This second route of creating the best offer is a good avenue to appeal to sellers who aren't necessarily motivated by price. Some sellers are in a fortunate position where they are not dependent on the proceeds of this sale. That being said, they may have other needs that you could capitalize on through contingencies (or a lack thereof). A removal of some or all of your contingencies (including but not limited to home inspection, appraisal, financing, etc.) puts the seller at a reduced risk of you being able to back out of the contract. While removing contingencies can put more liability and risk on the buyer's side, discuss with your agent how you can navigate these options and which combination of contingencies works best in your offer.
Special Terms: Rent-Back
Now this could be a really helpful strategy for all parties of the contract. Moving can be challenging and sometimes it can be helpful if sellers have an extended timeline that better fits their schedule after closing. If you as a buyer are flexible on move-in date and the seller is asking for more time, you could introduce a rent back period as a courtesy. This could be so appealing or necessary to sellers that you could maintain a few contingencies that you want to prioritize or keep the sales price closer to list. Again, talk with your agent and see what information they can get from the seller's agent to work towards your offer strategy. If you are working with a real pro, one of the first questions they will ask is "what is the seller looking for in an offer?" And from there, you are on your way to winning the home of your dreams! Contact Jillian Hogan Homes today to learn how we can win the house for you!
'Til next time,
Jillian
Every month Jillian Keck Hogan shares local real estate insight, advice, and more. To learn more about Jillian and her team, visit jillianhoganhomes.com and follow her real estate group on Instagram @jillianhoganhomes. Equal Housing Opportunity.
