How to make an offer sellers can’t refuse
To say the Denver market is “competitive” is an absurd understatement. Inventory is low, prices are high, and sellers are laughing all the way to the bank.
All is not lost. Even in this market, you can absolutely get a home you love at a price you won’t regret. All it takes is a skillfully crafted offer.
Here are 11 tools we can use to make the magic happen.
#1 Offer Above Asking
Offering more than asking price is one obvious way to woo a seller. And unless a home has been on the market for a while (which means “more than a week” around here), it’s almost unavoidable.
#2 Escalation Clause
Losing a house because someone offered just $1000 more than you did is heartbreaking. To eliminate that possibility, I recommend including an Escalation Clause.
You tell the seller that if there’s a competitive offer, you’ll increase your offer in $X increments—up to a certain maximum amount.
What keeps the seller’s agent from just telling you they have a higher offer? We ask for proof. Easy peasy.
#3 Appraisal Gap Guarantee
Sometimes, a home’s appraised value will come in lower than the agreed-upon purchase price. That’s trouble, because banks typically won’t lend more than 100% of appraised value.
To help a seller feel more confident about your offer (and more likely to accept it), you can include an Appraisal Gap Guarantee. Long story short, you promise the seller you’ll cover the difference between your offer and the appraised value.
Of course, this only works if you have the cash on hand to make good on your promise.
#4 Limited Inspection
In some situations, it makes sense to sweeten your offer by agreeing to let the seller off the hook when it comes to inspections. That doesn’t mean you don’t get inspections done. It only means you won’t ask the seller to resolve inspection issues. I can help you determine if this is a safe or risky move.
#5 Seller Rent-Back Agreement
When the market’s hot, sellers often start getting offers on their home long before their new place is ready for them, which causes a logistical nightmare. A Rent-Back Agreement makes your offer hassle-free.
Here’s how it works: You close on schedule, but you allow the sellers to stay in their—now your—home until an agreed-upon date for an agreed-upon rent amount.
#6 Non-Refundable Earnest Money
Earnest money tells a seller you’re serious about your offer. But it’s typically refundable if anything falls apart between your offer and closing.
One way to bump your offer to the top of the pile is to make your earnest money (or a part of it) non-refundable. That is, you tell the seller, “Hey, if you accept my offer, you can keep my earnest money no matter what.”
#7 Accelerate the Timeline
Consider offering a faster-than-average closing—say 21 days instead of 30. Not every bank can pull this off, so don’t offer it unless your lender gives you the go-ahead.
#8 Offer Cash
I know you may not have enough cash in the bank to buy a house outright. Most people don’t. But you can offer cash without having it—if your bank is on board with what’s called a “no financing contingency offer.”
In this situation, rather than getting pre-qualified or pre-approved, you actually get full-on pre-underwritten approval for your loan before you even make your offer. You’re still borrowing money, but it feels like cash to the seller because there’s no chance your loan won’t be funded.
This is risky because it eliminates one of your escape hatches. But if you’re 200000% certain this is the home you want, it’s a highly effective strategy.
#9 Absorb Seller’s Closing Costs
Typically, sellers pay for some costs at closing, like their own title-related fees, property tax prorations, and so on. Sellers love it when buyers offer to pay those fees, and they especially adore buyers who offer to pay their agent’s commission. If you choose to go this route, always include an “up-to” clause in your offer.
#10 Per Diem if Closing is Delayed
There’s nothing more frustrating to a seller than a delay in getting their funds. So offer to pay them a small but meaningful amount of money (like $100) for each day closing is delayed. Assuming you’re working with a reputable lender who never misses their deadlines, this is a no-risk way to sweeten your offer.
#11 Mix and Match for the Perfect Offer
Combining an escalation clause with an appraisal gap guarantee is like the one-two punch of offer awesomeness. Same with a fast closing plus non-refundable earnest money. I can help you figure out the best combination of tools to get the job done!
You need a not-so-secret weapon.
Putting together a winning offer requires having a seriously savvy ally by your side… a nerdy but charming market expert… a fierce but friendly negotiator.
I don’t mean to brag, but that’s me. I live and breathe the Denver market and I study negotiation like my livelihood depends on it. (Um, because it does.)
And because other agents love me, they tend to guide their clients to accept my offers—even when my offers aren’t the biggest or best. Why? Because they know they can count on me to do the job with integrity and honesty.
Enough about me. I’d love to know more about you.
