So you want to write an offer – what more should you consider?
Often times, especially in today’s competitive market, your offer will be competing against others. But fret not, there are things that your agent can suggest to make yours that much more enticing to the seller.
WINNING WAYS
Of all the offers reviewed and reported on by WSJ, here is the percentage of offers that included a strategy designed to make the potential buyer’s bid more competitive.
| 40.4% | Client Letter Potential buyer writes to the sellers in hopes of persuading them to accept an offer. |
| 24.8% | Escalation Clause An arrangement that automatically increases a buyer’s bid if a competing buyer bids higher. |
| 24.1% | Inspection Contingency Waived Potential buyer can’t cancel or renegotiate the contract based on the results of a home inspection. |
| 16.0% | Financing Contingency Waived Potential buyer’s offer is not dependent on his or her ability to obtain financing. |
| 8.7% | Preinspection Potential buyer commissions inspection before making an offer. |
| 6.9% | All Cash Potential buyer agrees to make the purchase without third-party financing. |
Conversely, certain tactics are simply not used in some markets. For instance, the escalation clause – which is an agreement to beat the highest offer by a certain amount. While an escalation clause might work in some cities, in other places they might put off a seller or agent unfamiliar with this tactic. In the same WSJ report, they reviewed offers made in 3 cities – San Francisco, Austin & Seattle. None of the offers in San Francisco & Austin included escalation clauses. Whereas, 71.7% of the Seattle offers included an escalation clause.
The most widely used effective tactic is a client/cover letter. With the letter, you want to convey that you’re a person behind the contract. In this way, the letter is another tool to increase the seller’s confidence. If you have a sympathetic story, if the owners are selling for a reason other than price, or if something about the home truly resonated with you – write a letter. It is a tangible way of convincing sellers of something intangible. In our experience, confidence will save you money every time.
