Get Your Purchase Offer Accepted
In today’s competitive market where multiple offers are the norm, it is very important that your offer stands out from the crowd so it is given every chance of getting accepted! Buyers and agents have to get creative with their offers and also provide full transparency upfront, so the seller will feel comfortable that a buyer will be able to close escrow. Here are 7 tips that you can prepare to help your agent to help you that will strengthen a buyer offer and ensure your purchase offer stands out from the crowd.
1. Include a Personal Cover Letter from the Buyer
A great idea in this competitive market, is to include a personal cover letter from the buyers with your offer, that explains a synopsis of the buyers situation and why they are the right candidate to purchase the home, also include a family picture too. If you can tug at the heart strings of the seller, they may be more inclined to choose your offer over others.
It is also a good idea to address any red flags in the buyer’s profile, so the seller is not put off by anything in the buyer’s profile.
2. The Pre-approval Letter Verifies Type of Financing
Provide a pre-approval letter that clearly explains what type of financing the buyer is getting and how much of a down payment they are using. For example, if the buyer is qualified for conventional financing and is putting down 20%, make sure to write this into the pre-approval letter, as this will usually place ahead of a FHA buyer that has a 3.5% down payment or a VA purchase offer that has no down payment.
If the buyer is submitting a FHA or a VA offer and is using a limited or no down payment, make sure to follow the rest of these steps below to strengthen the buyer’s offer, so it has a better chance of standing up against the conventional offer with 20% down.
3. Include a DU Underwriting Approval with The Offer
Always include a DU underwriting approval with your offer. A DU (desktop) underwriting approval is when the buyer loan application and credit report has been approved by Fannie Mae’s, FHA’s or VA’s underwriting system.
A DU underwriting approval displays the most important information on a buyer’s profile, which gives the seller a good idea of the strength of the buyer.
Make sure the terms on the DU underwriting approval match up with the loan program that is listed on the buyer’s pre-approval letter
4. Always Provide Proof of Down Payment Funds
Always include proof of down payment funds for the buyer. Make sure the name on the bank statements, or any other account being used for the down payment, matches the buyers name on the contract and approval, and also verify there are enough funds in the statements to cover the down payment listed on the offer.
Or, if the buyer is getting a gift from a family member, provide a gift letter and proof of funds from the donor. Seller and listing agent they do verify if down payment is sufficient with proof.
5. Is Everything Current on the Buyer’s Offer?
It is not uncommon these days for a buyer to be submitting offers for up to 2-3 months before they find a home, so sometimes the documentation (proof of funds etc) provided on an offer is a month or so old.
Therefore make sure all the dates on the buyer’s approval letter, DU approval and all funds provided are current and within the last 30 days.
6. Don’t Ask The Seller for Credits to Cover Closing Costs
A purchase offer asking for seller credits to pay for a buyer’s closing costs will usually place behind a buyer’s offer that does NOT ask for any seller credits! Most people assume because a buyer does not have funds for closing costs, just ask the seller to cover them. SOLUTION: To make a buyer’s offer more competitive, ask your agent / Loan Officer that if they can pay for ALL the buyer’s closing costs with a lender credit!
How does this work? It’s easy, instead of taking let’s say a 4% 30 year fixed rate on a FHA or VA loan, the buyer will take a slightly higher rate of 4.375% instead, and with this higher rate there is now a lender credit of roughly 2.5% available that can be used to pay ALL the buyers closing costs.
Another tip, is to offer to pay for the sellers Owners title policy and transfer tax, these fees amount to roughly $2,500 on a $400k home, so this is another way to sweeten the deal for the seller to accept your offer. We can also pay for these fees with a lender credit
7. Close the Transaction Faster
Being able to close a transaction faster is another way to entice the seller to accept your offer in this competitive market. For example, if a seller is reviewing 3 offers, and there is a 17 day offer, a 30 day and 45 day offer, usually the seller will take the fastest closing.
Also shorten the days of remove contingencies...
I have work with several lenders that they can make the commitment to close per the offer stated.
Again, in order to get your offer accepted , will need the experience, knowledge agent and Lender with your cooperative and understand today’s market.
Do Hoang Realtor