6 Tips for Making the Best Home Offer

Mark Strüb of Strüb Residential offers advice for making the most competitive offer on a house

In a seller’s market, the only sure-fire way for home buyers to make sure that their offer is accepted is to make a bid that far exceeds the asking price. Short of that, you’ll likely face some competition.

Still, there are some steps buyers can take to make their offer stand out. Mark Strüb of Strüb Residential, says he always works with buyers to make use of every advantage they have when making a bid on a home. But before getting into the specific steps buyers can make, Strüb cautions his clients to not get too caught up in the competition.

“This is not a zero-sum game where the seller has to lose and you have to win,” Strüb said. “This is a major decision about where you want to invest and, in some cases, plant your roots. It’s going to be a large chunk of your net worth. So you’ve got to remember why you are doing this in the first place and avoid getting distracted.”

It’s with that philosophy that Strüb offers his first tip for any buyer making an offer on a home: “Know where the nearest bottle of wine is.” Once you’ve located your source for stress relief, here are six steps a buyer can take to make their offer stand out.

Offer cash

If you are able to pay in cash, you start with a huge advantage over most other offers. Non-cash offers are always liable to fall through, and many sellers are willing to accept a lower price to avoid that risk. If, like the majority of buyers, you can’t afford an all-cash offer, get preapproved for a loan. That will help raise the seller’s confidence that your offer will not be retracted due to financing issues down the line.

Write a letter

Writing a letter to the seller gives you the rare opportunity to make your bid personal. Most sellers have an emotional attachment to their home. Even the most dispassionate of them will give a little extra consideration to an offer that comes with a story. You don’t need a sob story or to tug at their heartstrings, just let them know who you are and what you love about their house. Most sellers would rather see their home go to someone who is going to love and care for the building than to someone who is going to turn it into a parking lot.

Be flexible with timing

If you don’t have to be moved into your new home by a specific date, you’re in a strong position. By packaging your offer with a flexible timetable, you’re bid will stand out against those that pressure the seller to take or leave a deal immediately. Many sellers are also buying a home, and accommodation their moving schedule will be an extremely attractive proposition.

Know the comp sales

Your real estate agent can provide you with a list of comparable (or “comp”) sales of similar homes in the same or similar market conditions. That will help you make a competitive offer without overshooting. If the seller’s asking price is far above the comp sales, let the seller know that you’ve done your homework and make an offer that is more in line with the comps.

Make your offer non-contingent to appraisal

Many buyers will make an offer that is contingent to an appraisal, meaning the seller will have to pay the difference if the home appraisal does not support the purchase price. This can be a bit of a gamble for some buyers, but for those who have studied the comp sales, looked through the home with an inspector and feel confident with the value of the home, a non-contingent offer can put your bid at the top of the pile.

Offer an escalation clause

An escalation clause is an enormous boon for buyers, allowing them to offer their lowest bid and automatically increase it as they are outbid by other buyers. Most escalation clauses will stipulate an additional X amount of dollars up to a certain limit every time the bid is met or exceeded by another offer. If the clause is triggered, the seller is typically required to provide proof of the competing offer.