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Competition is growing more intense heading into the spring season’s busy buying market. Buyers will continue to compete for a limited number of homes for sale. Real estate professionals recently discussed with realtor.com® how their buyers are getting their offers on a home to stand out, besides increasing the amount they’re willing to pay.
Boost your earnest money.
Home sellers may look more favorably on a buyer’s offer that has more skin in the game. Earnest money is usually about 1% to 3% after an offer is accepted. “Buyers can get a leg up by putting down more earnest money and making a portion, if not all of it, guaranteed,” Mike Opyd, managing broker and owner of Chicago’s RE/MAX Next, told realtor.com®. “Yes, this means the sellers get to keep the money if the deal falls apart for any reason at any time. However, it makes a buyer look a lot more committed to doing whatever it takes.”
Add in a leaseback.
Home sellers are increasingly facing a problem of their own: not being able to find a home to move into after quickly selling their property. Buyers can offer a leaseback that allows the home seller more time to find a new place. “If the seller is living in the property, the buyer can offer to lease it back for 60 to 90 days, at no charge, to allow them time to find their next place,” Glen Pizzolorusso, an associate broker with Compass in Fairfield County, Conn., told realtor.com®. Read more about these add-ons: What If Your Sellers Have Nowhere to Go?
Consider an escalation clause.
This contract addendum can be used when a bidding war is likely. It will increase the buyer’s offer amount if the seller receives multiple offers that increase the amount of the most likely successful offer. It will raise a buyer’s offer if competitive bids roll in. But real estate professionals are torn on this tactic as it does tip the buyer’s hand on how much their client is ultimately willing to pay. Still, if a buyer is really willing to pay more for a home, an escalation clause could give them flexibility if other bids come in, and they wouldn’t lose out on a purchase because the first amount in their offers was lower than the maximum they would have been willing to pay.