Reports of a slowing market have people feeling hopeful that the market may favor the buyer for the first time in years. It may be premature to say the advantage has swung away from the seller. Even if the number of competing buyers drops by 80%, sellers will still have more than just your offer to consider. Unless you can afford to overpay for a house, you’ll still need a way to make your offer more attractive to the seller.  Any of these five suggestions will improve your chances of getting your offer accepted without depending on overpaying. 

  • Include your loan commitment with the offer. The loan approval process requires the seller to wait 30-45 days from acceptance of the offer for the buyer to provide a commitment letter. Some lenders will issue that commitment letter in time for the buyer to include the letter with their offer. Eliminating the time a seller has to wait will make your offer more acceptable.
  • Do Not Include a Radon Testing Contingency. Radon gas is a health risk. Your present home and workplace have a fluctuating level of radon. A radon test will reveal a  snapshot of the radon level for 72 hours out of 8760 hours in a year. That’s probably insufficient evidence to decide your home is radon safe.  A radon test might cost $300. A radon mitigation system guaranteed to maintain a low radon concentration level may cost no more than $1,000. Including a radon test contingency won’t protect you from radon, but it will cause sellers to view your offer as less attractive. Even if the ultimate cost to the seller is only $1,000, the uncertainty that comes with the contingency is more trouble than it’s worth. Plan to install a radon system to your specifications after you own the house. Keep the cost out of the negotiations.
  • Inspection Contingencies Are High Risk for Sellers. There are real-life stories of home buyers avoiding catastrophic expenses by having a home inspection before committing to buy. Every home inspection will reveal some safety risks, some conditions ready for repairs, and some indications of deterioration. (Shingles, air conditioning units, furnaces, and appliances do not last forever.) There are costs associated with owning a home. Expect you will need to spend five to ten thousand dollars on your home in the first year of ownership and triple that amount over the next ten years. Home inspection contingencies, unless modified, are high-risk for home sellers.  The home buyer who can assume costs related to conditions affecting the property has an advantage over buyers who want the opportunity to discover conditions and negotiate a seller-paid solution. If you can live with conditions that others can not, you may be able to give yourself the advantage of an inspection-free offer.
  • Closing Costs are Negotiable. Some high-priced offers do not net the seller the most money because the terms of the offer require the seller to pay more of the closing costs.   Property taxes, title insurance, special assessments, transfer taxes, and agency fees are all seller expenses in the standard Wisconsin real estate offer to purchase. Shifting any of these expenses from the seller’s side to the buyer’s side of the closing statement increases the net to the seller. For obvious reasons, buyers rarely offer to pay closing costs that the seller traditionally pays. Unique advantages have a psychological appeal that may be more valuable than their cost. 
  • Give the seller their choice of the closing date. No one knows the best date to close until you have accepted an offer. Competing offers will still be the norm. Most buyers will demand the seller commits to a closing date that favors the buyer. Allowing the seller to select the closing date is the most uncomplicated advantage you can gain over other buyers. 

The ideas we give our clients are authentic thoughts backed by data. All opinions are not for everyone, but anyone can improve their offer if they have options.  Our clients don’t always outbid everyone on price, and all of our offers are not accepted. But, our clients always have more ideas to improve their odds, and many of our buyers get accepted offers without being the highest bidder. 

Real estate markets change slowly. It’s probably too soon to have all the advantages of a buyer’s market, but that’s where your opportunity exists. Suppose buyers and agents revert to writing high-risk contingencies because they think they have the leverage to dictate the terms. Your bid will look better to the seller if you use lessons learned to appeal to the seller’s need for security.  

It’s our goal to give our clients every advantage to own their first-choice homes. 

Essential Real Estate, LLC
Patrick Meyer 608-209-0153
Tom Meyer 608-332-8331