May 25, 2022
With recent shifts on the demand side of the market related to rising interest rates, there has been plenty of talk of a market cooldown. However, continued low inventory means that there are still not many homes available which means that for the foreseeable future buyers and their agents are still going to have to get creative to win deals! Since the number of homes for sale is so low, it is not uncommon to get caught in a bidding war in this competitive seller’s market. On average, homes in Denver are receiving 5 offers each and are selling in just 4 days (Denver Housing Market). Here are 4 ways to help your offer stand out against others to buy your dream home.
1. Cash is king!
It’s no secret that an all-cash offer is the most attractive to someone looking to sell their home but not everyone is capable of purchasing a home without a loan. If an all-cash offer is out of reach for you, you could still try offering the highest down payment possible. Luckily, we also have access to all-cash loan programs, such as Accept.inc, that allow our clients to close with cash and then pay back their loan after the home is funded. These all-cash loan programs are also able to provide clients with a preapproval letter in order for them to start shopping right away for their dream home.
Direct Underwriting is also a great way to make your offer stand out from the lineup. Direct Underwriting is when your lender processes and verifies your assets, debts, income, and details of your property to give you final approval on your loan application. Essentially, underwriting is like being pre approved for any loan up to the specified amount you were approved for, making it easier for you when you find a home you love and want to purchase it with a mortgage.
2. Minimize contingencies as much as possible
In real estate, a contingency is a clause in a purchase agreement outlining an action or requirement that must be met for the contract to become legally binding. Some of the most common contingencies are those regarding: loan, appraisal, home inspection, and sale of buyer’s current home. One way to eliminate a contingency such as the sale of the buyer's current home is to use a bridge loan. A bridge loan is a short-term loan that stands until more permanent financing is acquired, oftentimes used to purchase a new home while waiting for the prior home to sell. When contingencies such as these are eliminated, it makes it much easier for a buyer to just “press go” and be ready to sign contracts on the house, making your offer extremely attractive to a seller and their agent.
3. Use a local lender for a mortgage
While an all-cash offer is ideal, most people cannot afford to buy a house outright without a loan. A great option that can help you stand out without an all-cash offer is to use a local mortgage lender who can help you close quickly. When choosing to work with a local lender as opposed to a bigger mortgage company, you are being provided with local knowledge and expertise on the current state of the market. Additionally, working with a local, trusted lender can make your offer look more attractive based on the positive reputation your lender has! Local lenders know that regardless of what kind of experience you had with them, your friends and family will hear about it so they want to make sure you walk away satisfied with their service and will sometimes even go as far as calling the listing agent to vouch for you!
4. Put down a larger earnest money deposit
By putting down a larger earnest money deposit you are signaling to the sellers of the home that you are very serious about your offer and are willing to let them keep your deposit until the sale is closed and finalized. Typically, most people put down 1-2% of the purchase price of the home upfront in their earnest money deposit. A higher deposit could grab the seller’s attention, potentially bettering your chances of getting the home!
Despite the intimidating competitiveness of Denver’s current housing market, these tips can make moving into your dream home closer than you think!
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