Buying a home always has its challenges. But in a seller’s market, buyers need to be totally prepared and focused — and ready to jump on the right opportunity.
Educate yourself about the Kitsap real estate market.
Every buyer’s situation is unique, and every property may need a different approach. But knowing what to expect in the current market will prepare you to make more calculated decisions. Read my quick summary of the current Kitsap County housing market here:
Consider proven tactics to strengthen your offer.
As an agent, I will never pressure you to take risks you don’t feel comfortable with. At the same time, I’ll be honest with you about your odds of success. You need intel on your competition (what other buyers are doing).
Your motivation should factor into the game plan. Do you need to be more aggressive, in order to get under contract to buy a home quickly? Or can you be patient, and take a more conservative approach, knowing it might require more time or compromise?
In either situation, I can provide guidance so that you can feel confident in your home search. Here are some of the tactics you can employ to make your offer stand out.
Waiving Inspections
Buyers can promise to purchase the property as-is, without a professional home inspection contingency. Note that this decision is risky, since there may be costly hidden defects such as mold, termites, foundation cracks, or roof leaks. Sometimes, sellers may also allow (or even provide) a pre-sale inspection report, to avoid having to negotiate any repairs later.
Free Seller Rent-Back
Sometimes, sellers request additional time to move out after the closing date. They may need extra time to pack, or their future housing may not be available yet. And they may need the funds from closing to help cover moving expenses. Buyers can offer a free rental agreement, allowing the seller possession of the home for days or even weeks after closing.
Appraisal Gap Coverage
If the home doesn’t appraise for the full sale price, it jeopardizes the buyer’s loan approval. The contract must be re-negotiated, or the transaction will terminate. To avoid this, buyers can commit to bringing additional cash to the table, if necessary. They can promise to put this additional money down to cover some or all of the difference between the sale price and appraised value.
Increased Earnest Money
Earnest money is basically a good-faith deposit. It helps buyers prove they are serious about purchasing. It’s typically 1-2% of the total sale price and is held in an escrow account until closing. The earnest money is typically applied to the buyer’s down payment or closing costs. But the buyer forfeits that money if they breach the contract (or back out of the deal for reasons that aren’t allowed). Aggressive buyers sometimes increase the amount of earnest money. Or they may offer to make some of it non-refundable, or release it to the sellers early… which is very risky.
Waiving Other Contingencies
An offer contingency is a condition that must be met before the sale transaction can be completed. If the criteria aren’t met, the buyers are entitled to a full refund of their earnest money. Sellers want as few contingencies as possible since they increase the odds of having to go back on the market. Depending on the buyer’s financing and property characteristics, some common contingencies could be waived. These may include the Appraisal Contingency, Title Contingency, Financing Contingency, Well or Septic Inspection, etc. It is important to discuss the various risks involved with your agent and your lender.
Buyer Love Letters (or not!)
While these emotional pleas used to be popular, they often create legal risk or liability. Buyers may inadvertently reveal personal characteristics in a letter to the seller, such as race, color, disability, nationality, familial status, religion, sexual orientation, etc. Sellers could then be accused of violating the Fair Housing Act if someone claims that their decision was discriminatory. For this reason, most listing agents won’t accept or deliver buyer love letters anymore. However, buyers can usually include a carefully-worded note about the features of the home that they love.
Quick Close / Rush Appraisal
Some sellers may emphasize the need to close the sale quickly, especially if the home is already vacant. Cash buyers have the advantage of closing within 2 weeks, whereas loans typically require 30-45 days for escrow and closing. However, some lenders can order a rush on the appraisal (for a price). In some cases, that could allow buyers to close in as little as 3 weeks.
Build a winning team.
While this isn’t a negotiation tactic, who you work with matters.
- A professional, hard-working REALTOR® can help minimize the stress of buying a home. I help you research, give thoughtful input, identify concerns, and answer questions. Read my agent profile and see past client reviews.
- I can refer you to trustworthy local mortgage lenders. They offer great mortgage programs, communicate regularly and respond quickly, and have a reputation for closing deals on time.
- I can recommend home inspectors who are thorough and knowledgeable. They can help you differentiate between big or costly defects and more minor or common issues.
- … and many other resources and referrals.
Tailor the offer to the seller’s needs or concerns.
It’s important to gather as much intel before putting in an offer. This is why I always connect with other agents to ensure we understand the seller’s situation.
- The seller’s top priorities (e.g., highest price, fastest closing date, extra time to move out after closing, etc.)
- The current offer environment (other offers received or promised)
- The seller’s openness or potential ability to make repairs
- How firm the offer review date is if specified
- The seller’s preferred timeline for the offer response, closing date, and date of possession
- Desired title/escrow company and officers
- Special requests or negotiable items (e.g., equipment or furnishings).
Submit offers that are “clean” and error-free.
A “clean” offer has as few contingencies as possible. Sellers want to minimize the opportunities for buyers to back out. But clean offers are also complete, accurate, and error-free. You’d be surprised by the number of offers that get rejected, at least in part, because of poorly-written offers.
Final Thoughts
Buyers need to have patience and be persistent.
In a seller’s market, buyers may need to make multiple attempts to buy a home before an offer gets accepted. Even great offers get rejected when someone else is willing to pay a lot more in a bidding war. The trick is to not let fatigue discourage you from trying because your efforts will eventually pay off!