In competitive housing markets across the country, making an offer that sticks has become increasingly difficult. Ensure your client doesn’t make the process even tougher by succumbing to one of these common mistakes.
Time kills deals. Dragging your feet means you could wind up paying more in a bidding war situation or missing out on the property altogether. Buyers need to be ready with their paperwork, such as bank statements, a preapproval letter, and documents supporting proof of funds, from the day they begin house-hunting mode. That way they can pounce quickly with an offer when they do find a home they like.
Making an offer for their preapproved amount
Smart buyers are getting preapproved to show a seller they’re financially able to purchase a home. However, I warn my clients that they should not be using that document to come up with an offer amount.
Many buyers come in with a preapproval for the exact offer price, but when you’re competing against other offers, including cash offers, you want to show financial strength. An exact preapproval could make a listing agent nervous because not only does the buyer not have any wiggle room to negotiate, but they might no longer qualify if interest rates rise.
Submitting a lowball offer
Lowballing a seller often backfires, particularly in a seller’s market. A lowball offer that isn't backed up with math or comparable sales data is disrespectful and could turn off the seller and possibly mean you will miss out on the property completely.
Waiving inspection contingencies
I don't care whether it’s new construction or even your mom’s house you’re buying from her – get it inspected. Furthermore, if you waive the inspection contingency in your offer, you may lose the earnest money if you later back out of the deal.
Not presenting yourself well enough
In a seller’s market, buyers need to take steps to make sure they look good in the eyes of the seller. In today’s highly competitive environment, the listing agent is trying to determine which buyer will be the easiest to deal. Buyers may want to avoid pointing out every defect, making nitpicky queries, or questioning the seller’s tastes. Basically buyers who act less than enthusiastic will see themselves at a competitive disadvantage when sellers are comparing multiple offers.
And last, but not least, I always communicate, educate and inform my buyers from the very beginning what they can and possible can not expect during a transaction. This way, everyone is always on the same page and when challenges arise, we can get through them smoothly and continue to stay focused on the goal at hand.