5 Tips for Getting an Offer Accepted in a Seller’s Market

Now is not a good time to buy a home. As a personal finance writer and aspiring homeowner, I feel qualified to say this. According to the National Association of Realtors, the supply of homes for sale in February 2024 was just 2.9 months. It takes four to six months to create a more balanced market between buyers and sellers. To make matters worse, home sales prices also rose 5.7% compared to the previous year.

Higher prices, fewer homes – what’s a hopeful buyer to do? If so, consider taking these steps to give yourself an advantage:

1. Work with an experienced real estate agent

I feel very fortunate to work with agents who have been in the real estate industry longer than I have been alive. She also has at least a passing rapport with other agents and local mortgage lenders. When she purchased her home five years ago, she came here after a strong recommendation from friends she had worked with.

A good real estate agent can be your best friend during the home search and purchase process. They’ve seen it all before and can offer some words of wisdom or reassurance if you’re secretly scared after signing the offer. For home. And best of all, it can help you craft an offer that will at least be seriously considered in a seller-driven marketplace.

2. Get pre-approved

If you are getting a mortgage to buy a home, your financial situation is absolutely critical to the entire process. Mortgage lenders will consider your credit score, existing debt, employment situation, and credit history to determine whether it is worth extending your loan. This is what happens when you apply for a mortgage pre-approval, and it’s a good idea if you’re hoping to buy a home.

Unfortunately, in a seller’s market, if you take out a loan and one of the competing offers is a cash deal, you’ll be at a disadvantage no matter what. But if you can show the seller that you’re pre-approved, you’ll establish yourself as a serious buyer and one who will be less likely to fall through the deal than someone who didn’t research their finances.

3. Have ample cash deposits

In some markets you need to deposit cash no matter what, but in seller-driven markets this is even more important. Basically, you’re writing a check to make a “good faith deposit” on a particular home, showing the seller that not only have you vetted their finances, but you have cash in the bank ready to go.

If your offer is accepted, the check will be deposited into an escrow account and, if the deal goes through, will be paid as a down payment at closing. Please keep this in mind, as you will lose the amount if you terminate the contract for reasons not specified in the documents. An offer of several thousand dollars may entice the seller to accept your offer. Because, again, you look like a more serious and committed buyer.

4. Add an escalation clause to your proposal.

If you want to gain an advantage over competing buyers who may outbid your home, you may want to have your agent write an escalation clause in your offer. This means that your purchase price offer can be increased by a set amount to beat other offers up to a certain point.

Do not exceed your pre-set budget to purchase a home — You don’t want to be house poor and struggle to afford the costs of homeownership. However, if your initial offer is $20,000 less than the maximum, you may want to consider adding that escalation to give yourself an edge.

Related: mortgage calculator

5. If possible, be a flexible buyer.

If you have the ability to be flexible when purchasing a home, now is the time to take advantage of it. There is probably no way to write flexibility into a contract. However, if you have an agent who is deeply involved in the local market, they may be able to advocate on your behalf through a seller’s representative.

I hope my book lets you know that I am a serious buyer who is not selling my home and that I have a month-to-month lease agreement. All of these factors mean there is no set deadline for closing or moving, and if the seller needs more or less time, they can work around it.

If you don’t mind waiving certain contingencies from the contract, this can be flexible. That said, I don’t think waiving home inspections is a good idea for anyone. A bad inspection report doesn’t mean you have to end your contract, but it does mean you’ll be fully aware of what’s going on with your home. And the knowledge always strength.

If you are looking for a house to buy right now, you can relate. Take a deep breath, get your finances in order, get a better mortgage rate, and cross your fingers. Eventually, your offer will be accepted.

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