Housing markets across Texas are booming and mortgage rates are lower than they’ve been in years, so there’s hefty competition in the buying market. Frequently homes have offers on them before ever being listed on the market. If you’re in the market to buy a new home, we’ve got some suggestions for how to make your offer stand out and be noticed!
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We’ve suggested getting pre-qualified for any loan before, but for mortgage loans it’s especially needed because of how quickly houses are being purchased. The average time a house spends on the market is decreasing. Your pre-qualification letter lets the seller know that you can back your offer and have the funds lined up to make a purchase. It shows that you are coming to the table already prepared. Many sellers won’t even consider an offer that isn’t backed with a pre-qualification letter.
To get pre-qualification, we suggest that you start the process 10-15 days before you begin looking at homes. Our loan specialists will help you get the right documentation together and lead you through the process. We’re offering some of the lowest rates in our organization’s history and our loan specialists are experts at getting you the best loan for your unique situation.
Offer Your Highest Bid
Being upfront with your highest bid is most likely the key factor to the seller considering your offer. In a seller’s market, they may have several bids coming in as soon as the house is on the market and they will consider the highest bids first. Because many homes are selling over asking price, it’s best for them to see your best offer up front.
Carefully Consider Your Contingencies
Even if you have the highest and quickest offer, if you include several contingencies in your offer, you may be eliminated from the set of considered offers. The fewer contingencies in your offer, the more appealing your offer may be. Make sure you have the time and finances to cover areas such as appraisal findings and inspections. Most financing contingencies can be avoided with your pre-qualification letter.
Increase your Earnest Money
Your earnest money is typically a small percentage of the asking price and is a way to let the seller know you are serious about the offer. Don't worry, if the offer isn’t accepted you get the cash back. Often, there may be multiple bids submitted over asking price for a home, but a larger earnest offering may be what makes your offer the most appealing. Make sure to work with your loan specialist to make sure you’re offering a contract that you can live up to and afford.
Be Cautious about Personalized Offers
In the past, buyers have written letters to sellers in an effort to personalize an offer and make a connection with a seller. While we aren’t suggesting that you skip this step, we’d be remiss to let you know that in some areas of the country, this is no longer allowed due to the chance of violating fair housing rules. Those rules state that a buyer cannot be excluded for consideration due to being a member of a protected class and often, these letters mention things such as age, family status or education. If you decide to write a letter, make sure that you are highlighting your financial offer and focusing on how you can make the buying/selling process easier for the seller to avoid any legal concerns.
Being prepared is your best bet for getting an offer accepted. Know the market you are looking in, partner with a great agent and have your finances in order and you’ll be all set to make an offer that is attention-getting. Contact us today to get your pre-qualification started!