What to Include in your Offer To Purchase a Home, for a Better Chance of Acceptance

Michigan housing market is all over the place. With the shortage of homes ob the current market homes are selling for over asking with multiple offers. What I'm going to show you are a couple things you can add into your offer to purchase, for a greater chance of acceptance, without having to pay an outrageous amount over asking.

APPRAISAL GUARANTEE

When an offer is accepted, an appraiser comes out to the property to assess its "real value" so for example) if you offered to buy the home for $200,000 with an appraisal guarantee, and when the appraiser comes out and says its worth $195,000, since you offered an appraisal guarantee up to a certain amount (you can choose any amount to top off at $5,000-$20,000) you'd be responsible for paying that extra $5,000 out of pocket. This is a great incentive to accept your offer as a seller Because in reality if your home was appraised for $195,000 you'd either sell it for that, or start the process all over again (unless FHA loan than appraisal stays 3 months) with the appraisal guarantee they know they'll get the $200,000 wether or not the appraiser goes lower.

ESCALATION CLAUSE

In this market where homes are getting multiple offers and you don't wanna offer over asking price right off the bat escalation clause may be for you! In the offer to purchase you can add this clause in up to a certain amount of money, it's up to you. Heres an Example)

the home is worth $200,000, you put an offer in at $200 with an escalation clause up to $5,000 over best offer. the seller has other offers one at $200,000, another at $204,000 and another at $209,000. now your 200,000 looks like it won't stand a chance but with that clause, youre offer is now actually $214,000 beating off the other offers. This is good to add when you know multiple offers are coming in, and don't want to necessarily ask over asking price in case theirs a chance you could get it for the sale price.

FREE OCCUPANCY

When someone goes to sell their home, the days after you already close and sell it are considered occupancy. Usually used for cleaning out the house. In most cases the seller has to pay for occupancy each day that is used. As a buyer putting in a offer it might be smart to offer free occupancy up to a certain amount of days. This will give the seller more reason to choose your offer over someone with the same price offering paid occupancy.

Higher Earnest Money Deposit

Putting down more money in the begging is going to show the seriousness of the offer, and the ability to pay. This deposit you will get back in the form of the downpayment on your home. So you aren't just throwing this money away! Unless the deal falls through on your end, then the deposit will not be refunded. Make sure you're serious before throwing down a higher amount, or any at all.

CASH OFFER

Now this won't be possible for all, but a cash deal is going to get accepted over others. You don't have to deal with any 3rd party mortgage companies, this will lead to a faster closing time. Also with a cash buyer an appraisal is not needed, because theres no lending company needing to make sure the homes is worth what they're giving you. To elaborate more, if you're getting a loan, and default on the loan and the bank needs to sell your home, if its not worth what you bought it for, they would be losing money in the end.

Inspection Waived

I would never recommend my buyers to do this, but in some cases they're people who possibly used to be home inspectors or just handy and can see themselves what needs to be done. A big part of the real estate transaction that usually leads buyers to bail is the home inspection process, with waiving this, theres more of a chance your deal is going to go through. I would recommend getting one either way, because there could be underlying problems you cant see yourself. Save yourself in the long run and get a home inspection.

Contact me if interested in Buying in Michigan! Id love to help you win these offer battles!

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