5 Ways to Write the Winningest Offer in today’s Real Estate Market:

Our nation remains in the midst of a major housing crunch.

Last year, lack of inventory and the resultant soaring prices left many would-be homebuyers feeling pinched. But now, interest rates are climbing, and many are feeling desperate to lock in a rate — which has fueled the fire.¹

Fortunately, if you’re a Buyer struggling to find a home, there is some good news. While it’s true that higher mortgage rates decreases purchasing power, there are additional ways to compete in a hot market such as this.

A higher Offer price will always get deserved attention. But most Sellers consider more than just the price when evaluating an Offer. With that in mind, I present to you five tactics that will help sweeten your Offers and outshine your competition!

You do want that house, don’t you? Read on!

The risks and benefits of each tactic must be weighed carefully in order to craft your compelling Offer to get that house, without giving away the farm. Take Heed:

1. Demonstrate Solid Financing

The reality is, no one gets paid if a home sale falls through. That’s why sellers (and their listing agents) favor offers with a high probability of closing.

Sellers particularly love all-cash offers because there’s no chance of financing issues cropping up at the last moment. But don’t despair if you can’t pay cash for your home. According to the National Association of Realtors, only about 1 in 4 home purchases are all-cash deals, which means the vast majority are financed with a mortgage.²And admittedly, here in the Greater Orlando areas, that number is closer to 40% all-cash to financing.

Yet if Sellers are assured that the financing will go through, buying with a mortgage doesn’t have to be that big a

disadvantage. The most important step you can take as a buyer is to get preapproved before you start looking for homes. A current (within 30 days) preapproval letter shows a Seller that you are serious about buying and that you will be able to make good on your Offer.

It is also important to consider the reputation of your lender. While sellers may not know or care about a lender’s reputation, their agents often will. Some lenders are much easier to work with than others, especially if you are pursuing certain types of mortgages like FHA or VA loans.³ If so, you’ll want a lender who specializes in these types of mortgages. If you’re unsure who to choose, I am happy to refer you to some key reputable lenders, who are known for their ease of doing business, and success rate in timely closing their loans. Just ask!

2. Put Down a Sizeable Escrow Deposit

Buyers can show sellers that they’re serious and committed to their purchase, by putting down a large earnest money deposit.

Earnest money is a deposit held in escrow here in Central Florida, preferably by a Title Company or Closing Attorney. Once the purchase goes through, that escrow deposit is applied toward the down payment and closing costs. If the sale does not happen to close, the buyer could lose some or all of that deposit. Once again, here is where a skilled and experienced REALTOR® can be your lifeline.

An Escrow Deposit is often approximately 1% to 2% of the Offer price, but offering a higher deposit can demonstrate to the Seller that you are serious about the property.⁴ This strategy can also be risky, and should be very considered very carefully. There are so many different factors that determine this, that I can’t even begin to count, but know that I can help you determine an appropriate deposit to offer based on your specific circumstances, as well as the property’s. After all, the big modus here from my vantage, is keeping your money safe.

3. Ask for Few, if any, Contingencies

Most real estate Offers include contingencies, which are clauses that allow one or both parties to back out of the agreement if certain conditions are not met. These contingencies appear in the purchase agreement and must be accepted by both the Buyer and Seller to be legally binding.⁵

Common contingencies include:

● Financing: A financing contingency gives the buyer a window of time in which to secure a mortgage. If they are unable to do so, they can withdraw from the purchase and the seller can move on to other buyers.

● Inspection: An inspection contingency gives the buyer the opportunity to have the home professionally inspected for issues with the structure, wiring, plumbing, etc. Typically, the seller may choose whether or not to remediate those issues; if they do not, the buyer may withdraw from the contract.

● Appraisal: Most lenders will not offer a mortgage on a home that costs more than it's worth. An appraisal contingency gives the buyer an opportunity to get the home professionally assessed to ensure that its value is at or above the sales price. If an appraisal comes in low, the seller may be asked to renegotiate the contract.

● Sale of a prior home: Some buyers cannot afford to purchase a new home until they sell their previous one. If the buyer is unable to sell their current home within a specified window of time, this contingency enables them to withdraw from the contract without penalty.

Since contingencies reduce the likelihood that a sale will go through, they generally make an Offer less desirable to the seller. The more contingencies that are included, the weaker the Offer becomes. Therefore, buyers in a competitive market have been volunteering to waive certain contingencies. This trend began slowly, and now it is very common to see purchases conducted with EVERY contingency waived.

I’m not necessarily recommending that. Most Buyers, understandably, are not so comfortable waiving all of their Buyer rights. However, in a tight market such as this, Buyers may have to carefully waive one or some. They must also recognize the risks of doing so. For example, a buyer who chooses to waive a Home Inspection contingency, may discover too late that extensive repairs and renovations are needed, despite no disclosure by the Seller and no visual observance of such. Likewise, a Buyer who waives the Appraisal can risk their mortgage failing. And if you find yourself in the unwanted position of having to back out of a home purchase without the protection of contingency, you may be saying goodbye to your earnest money deposit.⁶ I help you assess the risks and benefits of all contingencies. Each Buyer will be different as will each Property. Again, the integrity, skill and experience of the REALTOR® representing you is crucial.

4. Offer a Flexible Closing Date and/or Leaseback Option

When it comes to selling a house, money isn’t everything. People sell their homes for a wide variety of reasons, and flexible terms Offered by the Buyer, that work with their personal situations, can sometimes make all the difference. Faster isn’t always more desirable.For example, if a Seller is in process of planning a significant move, they may prefer a longer closing timeline that gives them time to find housing in their new location.

Similarly, a short-term leaseback, where the sale is Closed, but the seller retains the right to stay in the property, under a separate agreement from the new Owner, for a specified period of time, are becoming more popular.⁷ These arrangements enable the seller to use the money from the sale of their home to purchase their next house. A leaseback agreement also makes it possible for them to avoid moving twice when their next home is not yet ready to occupy.

Flexible closing dates and leaseback options can provide a powerful advantage for first-time homebuyers. If you have a month-to-month or easily transferable lease, for example, you may be able to offer a more flexible timeline than a buyer who is simultaneously selling their existing home.

Of course, the value of these terms will depend on the Seller’s situation. My practice always reaches out to the Listing agent to discover any or all of the Seller’s preferred terms, and then work with you to create an Offer that works for you and the Seller. Win-Win.

5. Work With a Skilled Buyer’s Agent

In this ultra-competitive real estate market, one of the greatest advantages you can give yourself is to work with a skilled and trustworthy REALTOR®. One of the first designations that I attained in my career was that of ABR® (Accredited Buyer's Representative). And my work as both a Seller (Listing) and a Buyers Agent, I know first-hand the best way to represent you in the purchase of your new home. I make certain you fully understand the process and assist you in submitting your most appealing Offer, with full knowledge of any or all risk. After all, we should all sleep well at night!

Through experience and skill and education, I know how to write Offers that are designed to win over both the Seller and the Listing Agent! The truth is, a good Listing Agent will play a huge role in helping sellers to evaluate the offers, and a Listing Agent too will want to work with a skilled buyer’s agent who is professional, communicative, and courteous.

Once your Offer is accepted, my job takes a new turn. For now I begin to handle the Time Line and any further negotiations with you; I coordinate any and all contractual details and paperwork that needs to be done, and I keep you fully informed of every step along the way. I am your knowledgeable advocate and I am working for you!

I Help You to Achieve the Right Offer for the Right House.

To recap, a competitive Offer need not be all-cash, contingency-free, nor sky-high over asking price. However, if you are serious about buying a home in today’s market, it is important to consider what you can and sometimes must do, in order to get your best chance of winning the deal.

If you’re a Buyer, I can help you compete in today’s market without getting blindsided.

And if you’re a Seller, I can help you evaluate Offers by taking all the relevant factors into account, to keep you from entering into a losing proposition in your Sale.

Please Contact me today to schedule a free consultation: DawnDeegan@gmail.com / 407.488-8074

Orlando inventory at its lowest level in 5 years!

This, just in from the Orlando Regional Realtor Association: Orlando’s inventory has dropped to its lowest level since March 2006, and the overall median price is now its lowest since December 1997 (kick out foreclosures and short sales, and the normal sales median is $155,000). Who do you know that is looking to buy or sell? Chose your Realtor ® wisely: choose me! Dawn Deegan is a Broker-Associate REALTOR® with Charles Rutenberg Realty. She holds the designations of Accredited Buyer Representative (ABR®) and she is a Graduate of the Realtor® Institute (GRI). She also holds the Transnational Referral Certification (TRC), enabling her to help in real estate endeavors, world-wide. Dawn is dedicated to providing only the best possible services and expertise to her Buyers and Sellers of residential Real Estate in the Greater Orlando area. This includes Windermere, Orlando, Winter Park, Baldwin Park, and Davenport. Her emphasis is on superior delivery of sophisti...

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