Buying a home? How to get your offer accepted

Perhaps you didn’t learn everything you needed to know in kindergarten. Like how to sew on a button. Or how to eat lobster. Or how to get your home offer accepted in a competitive housing market.

During summer 2021, Utah’s housing market was downright fire. According to the latest Kem C. Gardner report, there were only 700 vacant unsold homes, less than half the usual amount available. Experts predict the field won’t be changing much anytime soon. In order to nab a home, especially the one you really want, you need to start planning for your purchase ahead of time.

Do your legwork

Before hitting the streets, visit KSL Homes to get an idea of home prices. You can search for houses based on location, number of bedrooms and bathrooms, square footage and acreage. Once you know how much it will cost, contact a lender to be pre-approved for a home mortgage.

Pre-approved means the lender has already verified your finances and credit worthiness, and is ready to process your loan. Once you have the pre-approval in hand, you can add it to your home purchase offer. 

When considering multiple bids, most sellers will choose the surest deal. When you are pre-approved, sellers know financing will most likely go through, and therefore are more likely to accept your home offer. Plan ahead, because this can take about a week.

Ready

Not all applications are identical, but getting pre-approval typically means you’ll follow this process: 

1. Fill out a loan application. This can usually be done online, over the phone or in person.
2. Provide the loan officer with pay stubs, W-2s and bank statements.
3. A credit officer reviews documents, as well as your credit score (which influences your interest rate).
4. An underwriter approves or rejects your application.
5. If it’s a yes, you are given a letter stating you are pre-approved. This is usually valid for 90 days.

Bonus points

For an even greater advantage, consider pre-underwriting the loan. This means the lender has already guaranteed that you can borrow a set amount. This gives you equal footing with cash buyers, because all the loan paperwork has been done. And you may have a slight advantage. Typically, investors or cash buyers want a reduced price because it can be a quicker transaction. You can still offer the full asking price, which is obviously more appealing to sellers. Keep in mind, pre-underwriting can take a couple of weeks.

Get set

The fewer hoops the sale has to go through, the quicker it can close. Hence, getting rid of any contingencies amps up your offer’s appeal. For instance, if your offer hinges on selling your current home first, it will likely be rejected over one without any possible hangups. 

Once you sell your home, temporarily rent a place while you search. If you think you will find something quickly, maybe stay in a vacation rental. Just not one that’s so nice you won’t want to leave.

Less is more

A home inspection is another contingency you could work around. Typically when a house goes under contract, a home inspector evaluates the property. The inspection can be valuable because it may uncover unseen problems. Admittedly, you probably won’t notice leaky pipes or damaged shingles during a walkthrough. But you can forgo this step, assuring the home seller that you will take the house regardless of issues.

If that seems too risky, have the inspection but agree you won’t ask for repairs under $500, for example. Or, agree you won’t back out unless there is a major issue, such as radon or a crumbling foundation.

Go

When you see a property you like, don’t hesitate. Schedule a viewing as quickly as possible. If you like the house, be prepared to make an offer on the spot. You’ll also need earnest money, usually 1 to 3% of the asking price. This tells buyers you are serious and not just bidding on several houses at once. You could put down a larger percentage if you want to express a higher level of commitment, although that may not make a difference. 

Remember, the buyer could be given the money if the deal falls through on your end, whether it be financing or simply changing your mind. If you are rejected, your money will be returned. If the sale goes through, the earnest money is applied to your down payment or closing costs.

Price wars

When making an offer, use the trick used by retailers, but in the opposite direction. An item that’s $2.99 seems cheaper than $3. So, it makes sense that a bid of $410,000 looks like a lot more than $409,000. The subtle increase could bump the chances of getting your home offer accepted up a notch.

Going, going, gone

If there are going to be multiple offers, decide how much you are willing to pay. You can add an escalation clause, which means you are willing to outbid others up to a set limit. For example, the house is listed at $450,000. You agree to outbid anyone by $2,500, all the way up to $500,000. Thus, if someone offers $475,000, you automatically agree to $477,500.

If you decide to try this, you may need to provide proof that you have funding to cover the higher amount. This could be either cash or loan approval. Of course, if the bid reaches $500,000, you would be out of the running.

Bolster your bucks

It can get tricky when it comes to offering more money for a home. You may not be able to afford payments on a larger mortgage. Also, the mortgage company can only lend you as much as the appraised value. Instead, consider other ways to get your home offer accepted.

When selling or buying a home — or just about anything, if we’re being honest — there are all kinds of added fees. It may bolster your offer if you are willing to pick up the tab for some of the seller’s expenses. Title fees, real estate agent commissions, closing costs and even moving expenses are just some of the extras you might cover.

Free options

Throwing more money at the deal isn’t the only way to entice sellers to accept your offer. Sometimes, you just need to be congenial. And flexible. (Fortunately, not the yoga kind.)

If you don’t need a specific closing date — since your kids are loving that Airbnb pool — allow the buyer to choose. Perhaps they are moving into a new home, too, and need a little more time to finalize their own financing. 

You could also accommodate a seller by allowing them to lease the property from you for a short period. Whichever option, be sure there is a final date in the contract to avoid move-out issues later.

Love letters

As the housing market grew more intense, buyers tried to win over sellers by writing heartfelt letters. However, the National Association of Realtors® advises against it. While it may have worked for some, lawsuits also followed. Some rejected buyers believed they were discriminated against due to the personal information included in their notes. Instead, the NAR suggests keeping the transaction completely impersonal, sharing only contractual information.

Get your financing in order, keep a close eye on KSL Homes for new listings and be ready to work — fast — with the seller. With a little prep work and forethought, you’ll have your home offer accepted and be moving into the place of your dreams in no time.