How To Win A House In A Seller’s Market: A Complete Guide

You’re finally ready to take the plunge and make an offer on your dream house. You found something perfect for you and your family’s needs, and you’re willing to pay the asking price. It’s a sure thing, right? Not so fast.

The opposite of a buyer’s market, a seller’s market means there are more buyers than homes up for sale. Because demand surpasses supply, your full-price offer probably isn’t going to cut it. So, what can you do to land that perfect house you’ve searched for high and low? Using the tips listed below might get your offer accepted.

Navigating the real estate market can be tricky. Many home buyers work with a real estate agent, who’s often a buyer’s agent, to guide them through the sometimes complicated purchasing process.

In a seller’s market, not only does the number of buyers exceed the number of available houses, but sale prices rise. It’s possible to buy a house without an agent, but having a real estate professional on your side during such a big and complex transaction can eliminate a lot of stress.

Check out these tips for getting your offer accepted in a seller’s market, then read about them in detail by scrolling down:

1. Make your offer as clean as possible.

2. Avoid asking for personal property.

3. Offer above asking price.

4. Put down a stronger earnest money deposit.

5. Waive the appraisal contingency.

6. Make a larger down payment in your loan program.

7. Add an escalation clause to your offer.

8. Make a cash offer.

9. Make sure your offer is complete.

10. Offer 1 month of free occupancy.

A clean, no-contingency offer means you’re waiving all contingencies to make your bid a bit more competitive and appealing to the seller. A clean offer shouldn’t be contingent on the sale of another property or have other financial constraints. It should also be free of seller concessions, which are requests a buyer makes outside of the offer price, such as a request for help paying closing costs. When a seller is receiving numerous bids, a clean offer can help you beat out offers with contingencies.

Drooling over the sparkly chandelier listed in the exclusions? Don’t ask for it. Want the seller to throw in that cool lawn furniture? Skip it.

Your offer could be very similar in price to another offer that isn’t asking for items that belong to the seller, so it’s best to simply avoid asking for personal property if you’re serious about a home purchase.

A seller’s market isn’t the place for making low offers and hoping someone will bite. You’ll have to make your offer strong enough to win a bidding war. If you want the house, you’re likely going to have to go above the asking price.

Don’t be overwhelmed by the thought of offering over the asking price, though. Sometimes, you only need to offer $2,000 – $3,000 more to get the seller’s attention, but some buyers offer a lot more. How much more? Sometimes hundreds of thousands of dollars more. However, that’s not all that common. Offering even just a relatively little amount over the asking price will show the seller you’re eager to buy the home – and that you want them to consider you as a potential buyer.

Offering slightly above the asking price won’t end up costing you much in the long run. The amount you put down and what you pay monthly on your mortgage will only change significantly if you offer an amount far above the asking price. Keeping your offer aligned with the home’s value, while still going above the asking price, will help you secure the home you’re interested in.

Your earnest money deposit is proof you’re a good-faith buyer. Usually, the real estate broker will hold onto your EMD and put it in an escrow account. Later on, your EMD can contribute to your down payment and closing costs.

On average, EMDs are about 1% – 2% of the purchase price of the home. If you put a larger amount down, it may show that you’re a serious buyer and that your intentions are genuine.

But, if you do put more of an EMD down, make sure you intend to buy the home. If you don’t end up moving forward with the purchase, your EMD may be in jeopardy. If you’ve already signed the contract and don’t buy the home, the seller could keep your EMD as compensation for the time wasted.

This is a huge one in neighborhoods experiencing a resurgence in property values or gained interest. An offer indicating your intention to bring money to the table if the home doesn’t appraise will almost always set you apart. Just make sure you’re in a strong financial position to take this risk.

No matter the type of loan you choose, offering to put more money down is another sign of good faith to your seller. Anytime you can showcase that you’re in a strong financial position, you should do so. By offering a larger down payment than may be required, you send the message that you’re intent on the purchase and capable of meeting all financial obligations.

An escalation clause means your offer will outbid other offers up to a maximum price. In other words, you make an offer saying you’ll pay $X price for a home, but if a higher offer comes in, you’ll increase your offer to $Y price.

Keep in mind, even if you provide an escalation clause, it may be in the seller’s best interest to issue a counteroffer instead of accepting your escalation clause offer. The seller may also decide to raise the listing price instead of providing a counteroffer or accepting an escalation clause.

If you decide to move forward with this option, consult with a lawyer before submitting your offer. Your lawyer will be the one who writes this clause into the contract.

In a competitive seller’s market, buying a home with cash can be a smart move. It can make your offer look more appealing to a seller who wants to quickly finalize the deal. A cash offer can also help you avoid the extra fees and interest that come with getting a mortgage loan.

A cash offer proves a buyer is extremely well-qualified and has the financial means to expedite closing. Cash offers also allow the buyer to be in control instead of a lender dictating the closing process.

The importance of paying attention to the details of your offer should be a given, but mistakes happen often in this process. These mistakes may include missing disclosures, EMD or pertinent information for the purchase agreement.

In a competitive market, mistakes of this nature may result in your offer getting tossed. This is a crucial step in the process and one that real estate agents know all too well. It can be helpful to have an agent or real estate attorney help you write your best offer and review the paperwork.

If a seller receives multiple offers that are complete and yours isn’t, they may not give your offer a second look. If you want to make sure you have a real chance at your dream home, make sure to cross your “t’s” and dot your “i’s.”

When purchasing a home with a mortgage, your payment isn’t due until a month after your closing date. Why not offer your payment early to sweeten the deal? A seller could benefit from you paying “rent” for a month, and this may strengthen your offer.

If you decide to offer 1 month of free occupancy, just make sure you discuss all of the details beforehand. It’s wise to have this agreement in writing so guidelines are clear and concise.

There’s a lot to consider when navigating a seller’s market and placing an offer on a home. It’s important to act quickly when you find the perfect house, while also taking the necessary steps to ensure your offer stands out among the competition. Showing the seller you’re a serious buyer who’s willing to go the extra mile, both in your intention and financial offerings, can make your offer even more attractive.

Set yourself up for having your home offer accepted by starting the initial mortgage approval process prior to your home search. This not only helps you understand how much house you can afford, but it can give you additional credibility with the seller as they consider your offer.