Be even more flexible
Go beyond preapproval
It used to be good enough to be preapproved for a mortgage. Now, buyers need to be even further along in the loan process before they make an offer and compete with all-cash buyers. That means submitting all the documents your lender needs to approve the mortgage such as tax returns, W2s, pay stubs and bank statements.
Find a 24/7 lender
Use a mortgage lender that’s open on weekends. That way, if you put an offer on a house over the weekend, the lender can contact the seller’s real estate agent and reassure the sellers that you’ll be able to close quickly.
“The lender can tell the listing agent where you are in the loan process and stress that you’re good buyers,” says Ladawn Sperling, an agent with Coldwell Banker Residential Brokerage in Lakewood, Colorado.
Write a love letter
Anna Mcgee, a real estate agent in Lake Tahoe, California, encourages all her buyers to write a letter to the sellers to go along with their offer. The letter typically includes a paragraph about the buyers themselves, their experience when they first saw the property online and then again in person, and a note of appreciation of how the sellers took care of the property.
You can also do some research on the sellers to see if you can connect to them on a personal level, she says. “A buyer may hit an emotional chord,” she says. “Sometimes it works, sometimes it doesn’t.”
In some states like Colorado, love letters aren’t allowed because they can violate fair housing laws.
Be flexible for the seller
Time is money for sellers, so anything you can do to shorten how long it takes to close, do it, Mcgee says. In your offer, agree to reduce how long you have to get an appraisal done and the loan completed. These stipulations will then will go into the contract.
For instance, Mcgee’s buyers agree to get an appraisal and loan completed in 10 and 12 days, respectively, down from the typical 17 and 21 days in that market.
Another way to entice a seller to take your bid? Cover costs that the seller customarily pays for in your market. That
The market in Washington, D.C., is so hot for properties priced under $1 million that many buyers are waiving appraisal and inspection contingencies altogether, said Colleen Harkins Carter, a real estate agent there.
That means if the appraisal for the lender comes in too low for the sales price, the buyer can’t back out of the contract. Instead, the buyer has to pay for the difference by bringing more cash to the closing.
And instead of requiring an inspection after going into contract, buyers are getting inspections before they even make an offer. It’s not cheap, either, about $500 a pop.
“It’s not uncommon at an open house to see prospective buyers going through the house with their home inspector,” said Harkins Carter. “So when they make an offer, they already know what they’re getting into.”
Consider stale properties
Buyers often jump at the newest listings, largely because many markets have such a dearth of inventory. But those quickly turn into bidding wars, and you end up paying way more than the listing price, says Jason Castro, a real estate agent in Dallas.
“Oftentimes I find opportunities by looking at a property that has been sitting on the market for 30 days,” Castro says. “No one is looking at it even if the price has been reduced.”
Manage expectations
Instead of focusing on finding a dream home, buyers should concentrate on a good-enough house, real estate agents say. Think of which musthaves you can let go of, so you have more properties to choose from.
“You have to make compromises and sacrifices on things you may want. You may not find that perfect house,” Leff says. “If you do, oftentimes you’ll be outbid.”