A seller’s market means that there are more buyers than there are homes available for sale like the one we have right now. Inventory in many Bay Area counties are below 1 month. Buyers are faced with situations where there are 10+ competing offers. I make offers for my own investments and I’ll be honest not all my offers are accepted, either. I literally had an offer I lost out on because my contingency period was 17 days and the accepted offer was 10 days!

From the seller’s perspective there are two things they care about the most: 1. Maximize their net proceeds 2. Lower the risk of the deal falling through. Knowing that, here are some market-proven ways that I use for myself and my clients to push the offer to the front of the line:

  1. Make the offer as clean as possible

    Your offer should not be contingent on the sale of another property. Don’t ask for concessions like personal property or help with closing costs.

  2. Waive contingencies

    The downside with waiving contingencies is that you’re putting your earnest money deposit at a higher risk. If the seller has already done an inspection report and it looks good it is probably ok to waive the inspection contingency. Most properties in a hot market will appraise, assuming you are not making crazy offers. Unless the lender absolutely requires it consider waiving appraisal contingency as well. If you are not comfortable waiving the contingencies you can instead agree to pay the seller say, $2,500 or next month’s mortgage payment, if you walk away.

  3. Ask lenders for Desktop Underwrite (DU)

    Lenders will request your W-2 and credit report to pre-approve you. To keep turning the capital over and make more loans, lenders will sell your mortgage on the secondary mortgage market to buyers such as Fannie Mae and Freddie Mac. DU essentially takes the lending process a step further to fully underwrite the loan so it is ready to be resold and there is no risk for the lender. This will enable you to waive the financing contingency and shorten the time period. It’s almost as good as cash.

  4. Close faster

    Most lenders can process the loan in as few as 17 days now. Put the shortest period you and your lender are comfortable with, without putting your earnest deposit at jeopardy.

  5. Deposit Higher earnest money and down payment

    Instead of the typical 3% earnest money deposit and 20% down payment, if it is financially possible and responsible, putting more down will show the seller you are serious and have the ability to close.

  6. Make cash offers

    In terms of effectiveness this should rank higher but it landed lower on the list because of how unrealistic it is for most people. Not everybody has a rich uncle but if you can borrow from family members cash offers greatly reduce the risk in the seller’s eyes and often they will accept it over a higher competing offer.

  7. Use the listing agent for representation

    Not always recommended, but in states where dual representation is permitted, having the listing agent represent you so they earn double commission gives great incentives for the agent to push your offer for the seller to review. However, the seller is the one that pays the agent’s commission and when push comes to shove the agent might not have the buyer’s best interest in mind. If this is your first few real estate purchase I definitely do not recommend this.

  8. Put your best foot forward

    This is no time to play games. Have your agent analyze similar recently sold properties and put in your best offer the first time. In a multiple offer situation, the seller is not obligated to counter every offer. They often take the best one or counter the top few. You can come in low with the offer, but you probably won’t come into that house.

  9. Tailor the offer to the seller’s needs

    Find out through your agent what the seller’s situation is and why they are seller. Maybe they need a month or two of rent back to find the house they’re relocating to or need help clean out their junk. Sensitivity to the seller’s non-financial needs might just be what is needed to set your offer apart.

  10. Pay the seller’s closing costs

    Selling a home can be expensive. If the you’re financially able, consider paying for part or all of the seller’s closing costs and make it easier for them to say yes.

  11. Be fast

    Put technology on your side and have automatic alerts set up with your agent. Once a property fit your criteria and numbers hit the market submit a strong pre-emptive offer to sway the seller to accept and take the property off the market.

  12. Have an escalation clause

    An escalation clause is one that says if there is another offer higher than yours, you automatically increase it by X dollars but up to Y dollars. The downside is that you tip your hand to the seller, you might as well go ahead and put in your best and fairest offer the first time.

  13. Build relationships.

    This one is more up to your agent. Even with all the crazy money floating around, I still believe at the end of the day real estate is about relationships. I always paint a color or story with the listing agent who my buyer is and show their seriousness and ability to close. I also build rapport with the listing agent and make sure the offer is complete and all instructions are followed. I don’t want to create any headaches or extra for the agent to give them a reason not to present my client’s offer.

  14. Write a love letter.

    Write a brief letter about who you are and what you like most about the house. The reason this one is down so low is because almost everybody does it, therefore having it does not really set you apart.

  15. Include your pre-approval letter.

    Also lower on the list because this is table stakes now and sellers practically don’t even look at your offer without pre-approval. If you’re making offers without pre-approval you should consider firing your agent because they’re just setting you up for disappointment.

  16. Make pre-emptive offers.

    Not every agent will take this (in fact, probably very few), but sometimes if you make a strong enough  of a offer that the sellers just can’t refuse they will consider forgoing the rest of the marketing efforts. Know that though the seller and their agent’s goal is to maximize the value of the property. Typically they set an offer date to have multiple buyers submit offers at the same time to drive each of them to overbid. Because of this the seller’s agent will usually ignore or advise against pre-emptive offers but hey, you never know.

What’s your favorite tip? Did I forget anything? Comment below if you have more you’d like to share.