This guide is written to be an overview for the 2020-2022 Market, and while much of the content is relevant, be sure to speak with your agent on specific professional guidance on your circumstances and the market geography and timing for the area you’re looking in.

Your offer to purchase a home is comprised of multiple criteria:

- Sales Price
- Seller Concessions

- Deposit

- Financing & Type

- Closing Timeline

- Contingencies

Sale Price
It's important to understand the current market. Most homes are selling for at or above list price currently, so unless there's unique circumstances on a particular house, a good offer would start at the list price. The seller is not always open to back and forth negotiation, and multiple offers are common. It's best to put your best foot forward (or close to it) in your initial offer as you cannot count on the opportunity to revise your offer.

Seller Concessions
Asking for seller concessions (to cover buyer closing costs) reduces the net amount a seller receives. Not asking for seller concessions results in more money to the seller and a stronger offer.

Deposit This Earnest Money Deposit, customarily 1% of the sales price, is paid to a third party at the time a contract is signed. Should the contract progress without issue, the deposit is returned to the buyer at the closing table and used towards down payment/closing costs. In the event of cancellation of the contract, certain clauses in the contract provide for the buyer to be returned their deposit. If the cancellation of contract is not due to an established contingency (mortgage, inspection) then buyer may end up forfeiting their deposit. A larger deposit shows more seriousness and may help you offer get accepted.

Financing & Type Different types of financing are seen as stronger or potentially more difficult to potential sellers. Government backed mortgage types, including FHA, USDA and VA have additional requirements on the property condition. A full cash offer is most attractive to a seller, followed by a Conventional mortgage.

Down Payment The down payment on the mortgage gives the seller insight into the buyer seriousness and qualifications. The larger the down payment, the better qualified the buyer appears and the more less opportunity there is for mortgage issues during the process. A conventional loan with a 20% down payment is considered ideal, whenever possible.

Closing TimelineWhenever possible, I try to have a discussion with the seller's agent to determine what a seller would consider ideal in an offer, including timeline. Given their circumstances, some sellers want to be able to close the sale as soon as possible, others have reasons to ask for a longer timeframe. If you have the flexibility, matching the proposed timeline to the sellers' needs can help strengthen the offer (without additional costs to you).

Contingency - Inspection & RepairsOffers can be made more attractive to sellers by limiting or eliminating their concerns about potential repair requests. Offers can include a dollar limit on repair requests, or can agree to an "as-is" sale where all repairs become the responsibility of the buyer. We can discuss each home, as not all may be good candidates for including these limitations. The buyer can also agree to an expediated time period to complete their inspections (the typical 14 day period can be shortened to 7 or 10 days). Limitations on repairs requests can be effective, but I do not recommend waiving inspections.

Contingency - Mortgage & Appraisal If you're purchasing with a mortgage, the contract will be contingent on that process. From the time of the offer, I explain the strength of your qualifications and qualifications of the lender you're using.The mortgage is contingent on an appraisal to show the property is in sufficient condition and has sufficient value. Unless you have significant cash available, you won't be able to waive the appraisal contingency. However, you can including in your offer to pay "up to $xxx above the appraised value, should the value of the property not appraise for the sales price." This is something we can discuss in detail.

Contingency - Sale of Other Property Many buyers need to sell their current property before buying another. If so, your offer will reflect this - "contingent on sale of property that is under contract/on the market/not yet on the market." The best scenario is to have your property under contract with a strong buyer (or removed the contingency all together). I'll submit information on that contract with your offer to purchase to show the strength of your buyer/contract.

Escalation Clause This somewhat unique tool is similar to eBay bidding. We can submit your offer as $A, that escalates to be $1,000 higher than any other offer, up to $B. (i.e. offer of $250,000 that will escalate to be $1,000 higher than any other offer, up to a limit of $275,000). This increases your chances of being the offer with the top sales price, without offering your max. Note that not all sellers/listing agents will accept escalation clauses.

Making the strongest possible offer:

- Offering appropriate Sales Price, putting solid offer in the first time

- Don't ask for seller concessions, if possible

- Consider increasing deposit above the typical 1%

- Strive for at least 20% down payment, when possible

- Consider seller's ideal timeline when proposing closing date

- Consider limit on repairs, or "as-is" sale

- Consider your willingness to exceed the appraised value

- Ease sellers' mind regarding sale of contingent property

- Use escalation clause when there are multiple offers on a property