What to do to get your offer accepted!
Buyers in this real estate market are in a very good position. With surplus inventories of homes and condos, sellers are extremely happy to have any offer. If you are looking to get a great price considerably lower than the seller’s asking price, then your offer has to be extremely appealing or you are either going to receive a counter offer from the seller, or worse, you will just be rejected or receive no response.
Before going out to look at what is available find out exactly what you are qualified to buy. If you do not have substantial sums of cash on hand to make a cash offer, this means contacting your lender, or contacting your realtor to obtain a lender recommendation. Explain to the lender what you wish to accomplish – buy a 2nd home, a vacation rental condo, or whatever it is you would like to buy. The more information you can provide, the better he can determine the rates and price range. Also provide your bank statements, tax returns, and anything else the lender requires in order to give you a pre-approval letter. A pre-approval letter shows that your documents have had a preliminary review and you have already been pre-approved for a loan. In the past lenders readily gave pre-qualification letters to anyone who called in and stated that they had an income – nothing was verified.
When presenting offers to sellers with a pre-approval letter, you are showing the seller that you are serious, have already contacted a lender and the lender has already reviewed and approved your documents. In the current state of the mortgage industry, having a pre-approval letter versus a pre-qualification letter is critical.
Even though your offer may not be the dollar amount the seller is looking for, being pre-approved has the seller thinking twice before countering or rejecting the offer. Offers are not as plentiful as they were in years passed, so sellers do not want to lose the opportunity to sell when an opportunity exists. Try to be reasonable in the offered amount and keep contingencies to a minimum. To strengthen the offer, attach a cover letter supporting the price and terms of your offer. Citing recent comparable sales also helps. Always try to make it a win/win transaction.
Having a cash offer with a short escrow period and few contingencies goes a long way in this market. With lender restrictions changing daily, cash in hand most often will obtain a property at a lower price than one at a higher offered price but with loan restrictions.