The prospect of bidding wars and dealing with competing offers is enough to make prospective Dallas real estate home buyers say, “Thanks but no thanks.” Almost every deal we’ve done in the past year — from the buyer and seller side — has involved multiple offers. It certainly increases the stress level, but it doesn’t mean your new home is out of reach. With the right guidance and our tips, you might have what it takes to win that home you’ve had your eye on. Read on for our tips for placing the winning bid on the home you want!
Hire a (Good) Dallas Real Estate Agent
Without fail, a seller or a listing agent would rather work with a real estate agent than the buyer directly. There are a lot of reasons for this, but mostly it means a less risky process for the seller and that the buyer is more informed of the process.
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Cash is King (Even With A Mortgage)
Obviously, if you have the ability to offer cash for a home, that will give you an edge over any competition. But if you can’t do this — you can still write an “all-cash” even though you are getting a loan. By presenting an offer in this way — removing all financing contingencies such as appraisals or personal qualification — you can better compete with true all-cash offers. Additionally, some newer start-up services can provide “cash offer” financing that will provide you the access to liquidity to create an all-cash offer for a fee of 1 to 3 percent of that overall value of the offer, but that adds cost of the home substantially. Of course, it should go without saying that you should have ALL of your financing ducks in a row before you even come to the table.
Increase Your Earnest Money
Substantially increasing your earnest money in your offer can help give you an advantage by proving-up your cash position and demonstrating your commitment to close. Because earnest money is refundable to you in the inspection/option period, this is a great way to better your offer without adding much risk. Historically, the earnest money amount was roughly 1 percent of the offer, but lately, we’ve seen that dramatically increase.
Make it Easy On The Dallas Real Estate Seller
It’s a seller’s market, obviously, so the easier it is for the seller to complete the transaction, the sweeter your offer will be. From free lease-backs and timing to title company preferences, the sellers are looking for more than the right purchase price. Consider shortening the inspection period to 3-5 days, depending on your risk tolerance. Don’t ask for many contingencies or conditions. You can even offer to pay for the buyer’s title policy, which is typically paid for by the seller during the closing process.
Don’t Be Demanding (At First)
Whatever your concerns — conditions, ongoing costs, repairs — don’t bring them up during the offer period. Wait until you put the property under contract. Your initial goal is only to win control of the property. Later, repair items or other concerns can all be covered during the inspection/option period. The more questions you ask upfront, the less likely your bid will be accepted as it indicates a more risky and more demanding buyer.
Timing And Communication Are Critical in Dallas Real Estate
Most houses put on market these days follow this timeline: List on MLS Thursday, showings Friday through Sunday, offers due on Sunday or Monday. During this period, your agent should be in constant communication with the seller or seller’s agent. The best time to submit the offer is as close as possible to the offer deadline. That way your agent can (hopefully) find out how competitive other offers are before submitting yours. While the seller cannot legally give specific information, they may offer some general information about how your bid looks compared to others. The earlier you send in your bid, the less competitive it might be. Better to wait.
Carefully Consider Writing A Letter
Some buyers think a personal letter with perhaps a photo of the family is a good way to pull at the heartstrings and push their bid in front of others. Generally, we consider this somewhat risky. It can come off as manipulative and pandering. Or the seller may just not like what you have to say. Whether or not to write to the seller is a decision that should be made with your agent based on what you know about the seller and the situation.
We know that having to compete against multiple buyers isn’t ideal, but it’s the new normal in Dallas real estate. Fortunately, with the right strategy, you can be sure you have the best shot at winning the home you want.