Like many first-time homebuyers, you’ll first reach out to family and friends when you decide to buy your first home. While the advice you receive has the best of intentions, what you hear may not be the way to win a contract in today’s fast-paced seller’s market.
Consider the following tips:
1. Obtain pre-approval
Talk to a couple of local mortgage lenders (not necessarily large banks) and get your pre-approval early on. Looking at homes without having your pre-approval is pointless; you’ll end up wanting to make an offer and then have to back-pedal to get your financing in order. You may be too late to the party at that point.
Getting pre-approved generally takes 48 hours, and that’s only if you have bank statements, tax returns and pay stubs on hand. If you take this step first, you’ll know what you can afford and better target your home search, plus you’ll be ready to make an offer. Sellers simply won’t consider a contract without a pre-approval letter.
2. Be willing to waive contingencies, including the home inspection
In my experience, very few buyers have the luxury of conducting a home inspection in this market. If waiving the inspection makes you nervous, consider buying a home warranty to cover the home’s major systems should something break. Also, consider waiving the appraisal and financing contingencies. Making a “clean offer” to a seller has been very successful lately.
3. Offer a high earnest money deposit
Show a seller you’re serious! The earnest money deposit (EMD) shows a buyer’s good faith in the transaction. If a typical EMD is $10,000, then offer $20,000. Don’t worry, this amount is credited toward your down payment at closing so simply consider it a technique to get the seller’s attention.
4. Be flexible
Consider the seller’s timeline. If they want to settle on a certain date or with a particular title company, offer to meet those requests. Also, giving a seller extra time to move via a free rent-back can make your offer very appealing.
5. Write a personal note to the seller
Not everything in a home sale is about money. Seller’s feelings about their home are often very strong. Appealing to their nostalgia in a short, personal letter about how you’ll enjoy living there might sway them!
Lynn Cooper is a licensed REALTOR in Virginia with McEnearney Associates in McLean. Whether buying or selling, Lynn is 100% committed to her clients before, during, and after the transaction. Connect with Lynn at 202-489-7894, [email protected] or @lynncooperrealestate.
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