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3 Tips to Make Your Offer Stand Out in a Competitive Market​

As most of us have seen home prices are rising and the inventory of homes for sale is shrinking, homebuyers realize they have to adapt to a market in which sellers call the shots. 

In Tucson our current absorption rate is 2.9 months which is a big sign of a sellers market. In comparison, during the market crash of 2007/2008 Tucson’s absorption rate was 12+ months worth of homes for sale.

As the story goes you fall in love with a place that fits your budget then get in line with other buyers bidding on the same home. Homebuyers in hot neighborhood markets may need more than just money to get what they want. They must give sellers enough reasons to pick their offer over offers from other bidders.

Here are three ways to make your offer stand out:

  • The Human Factor. My favorite method is to get the seller to like you. Letting the seller know why you want to live in the property they once called home improves your chances of winning a bid. I have closed deals with clients with the use of the old-fashioned letter. In my opinion it is one of the most useful tools for buyers these days. If the sellers live there, they love the house, and they are more inclined to give it to someone they have more in common with.
  • Eliminate Resistance. The next way to make your offer stand out is a quick inspection period. Traditionally you have a 10 day period to complete inspections and respond to the sellers of what you want fixed. If a seller is reviewing two completing offers and one has a 5 day inspection period compared to a 10 they will be more inclined to accept the offer with the least resistance.
  • Go all in.The final tip on how to make your offer stand out is by escalate-ing your offer. Many buyers think they can save their highest and best offer for the end, when the seller presents a counteroffer. But sellers can simply accept the highest offer and reject the other offers without further negotiations. Which is a recipe for a big let down. One way to get your offer to stay in the game is to add an escalation clause to your offer:

– “You place an offer, and your offer is X, but you have a clause in there that says you will increase your offer by an X amount over any other bid up to a certain point”.

–  For example, a property is listed at $185,000. The buyer submits an offer at $180,000 with an escalation clause of $2,000 up to $188,000 or whatever amount you determine.

It’s a safer way of making your offer stand out by letting the seller know you are willing to pay more for the house, without the risk of offering more than what is needed to get a contract. If the escalation clause is triggered, the sellers generally are required to show the other offers to the buyer.

 

In the end, the home buying process can be exhausting with all of the searching, touring, negotiating, and being on call for updates on bids. But remember to enjoy the journey. Having a respectable mortgage lender and knowledgeable realtor on your side is sure to help you find success with your home offer and with home ownership.