9 Keys To Unlock Your Winning Offer In Today's Extreme Seller's Market

1. Know & Go!™ - Questions that need to be answered before you step into the house of your dreams!

a. How are you going to finance your purchase? - Cash? Mortgage? Do you know what type of mortgage? 30 yr, 15 yr, Conventional, FHA, VA, Renovation?

b. If using a mortgage, what is your target monthly payment amount desired?  

c. Did you work up a monthly budget that includes estimated amounts for monthly expenses: mortgage, insurance, utilities food etc.? 

d. Do you have an up-to-date pre-approval or do you have a fully underwritten pre-approval? (Some lenders offer a pre-approval where you have been pre-underwritten by an underwriter. This type of pre-approval is a powerful tool when making an offer in todays seller's market.)

e. What is your down payment? Your lender will help in determining the optimal downpayment based on your target budget.  

f. What is your earnest money/good faith deposit amount? This is another powerful offer component and seller signal. A strong good faith initial or additional deposit tells the seller your are committed to the purchase of their property.  

g. Do you have money for an "appraisal gap"? If agreed upon, an "appraisal gap" is an additional amount of money a buyer brings to closing, if the bank's mortgage appraisal is lower than the contract purchase price. The difference, is covered by the appraisal gap funds. If you decide to offer an appraisal gap with your offer you will need to attach "proof of funds (POF)" or statement showing you have the amount available in liquid money to cover the gap. The POF gets submitted with your offer.  

h. When can you close? Is the purchase of the property contingent on you selling any property? Do you have a lease, are you selling a home? Can you be flexible with your closing date?

i. Are you familiar with the home values in the neighborhood your are interested in? A Comparative Market Analysis (CMA) is a report created by a professional that reveals the most recent sold properties and market conditions in the area you are interested in. Learning what sold, what's for sale, and what's under contract will aid you in determining the strongest offer to make on a property. 

j. Do you have an attorney? An attorney can be an invaluable member of your "purchase" team and is necessary immediately upon and accepted offer. Do you need a recommendation? 

2. Make Your Strongest Offer First

Since 2021 the "Best and Final" concept has been in play in all most all real estate transactions in New Jersey. While it is not a legally enforceable concept. It does provide a deadline which causes buyers to react with urgency. The answers to #1 above ensure you are ready when you walk into a house. Did you know that after the a Best and Final deadline, you can update and or make a new offer. Of course you should not hold back on your original offer, but if you can no live without the house, send an update and win it! 

Note: A strong offer is one the maximizes all of your offer elements - purchase price, type of financing (cash, loan, downpayment, good faith earnest money (escrowed amounts), appraisal gap coverage (as desired), inspection contingencies (as desired), and closing date flexibility.

3. What's Your Budget?

Have you calculated your target spending amount per month? How much you can comfortably spend and be committed to - in either cash spent, ongoing mortgage payments, repairs, or other homeowner costs. With your personal budget in focus you should be able to find a manageable offer that fits your situation. 

4. Sellers want friction-less and risk-free transactions.

You have to put your best foot forward. While a buyer may not be able to be the "best" in all the terms of an offer, one can still win an offer/be accepted if one or more of the terms create that risk-free/frictionless feel for the Seller. Every buyer's offer is unique and strictly their choice as is a Seller's response to accept or not. Buyer's should present an offer with optimize the terms as they are able. (Example terms: purchase price, financing type, inspection details, closing date, and any other features that are important to the sellers.

5. To Waive Or Not? - That Is The Question and Your Decision.

Since 2020, competing in an extreme Seller's market placed new demands on the Buyer's offers. Buyer's offers have included waiving of inspection results, appraisals, and other contingencies. What does that mean today? Plainly, it is a decision that a Buyer needs to weigh carefully. On the one hand presenting an offer that is as "frictionless" and "risk free" as possible for the Seller. On the other hand the Buyer must protect their interests. It is a balancing act. A buyer should gather as much information about a property, as quickly as possible, construction savvy professional, and any other qualified party that is able to provide useful information that will provide a Buyer with peace of mind to move forward.  

With multiple buyers lined up to purchase a property a Seller has the flexibility to choose the best offer that limits their risks. The Buyer is looking to be that accepted offer - but with terms that support their future. 

If you have specific questions about the subject, feel free to reach out to me - I would be happy to share information that I have experienced by seeing hundreds of printed offers over the past few years. 

6. Protect Yourself - Use Showings To Know What You Are Buying 

If you are not a builder or contractor think about finding an expert to help you before or during the offer. Thinking outside the box can be useful here. 

7. Talk To Your Agent!

A great agent will talk with you about the details of a property before an offer. Talk to your agent a lot - ask questions. Work together to make an incredible offer that is your best.

8. Give Your All - The New Jersey market is still Hot!

New Jersey is still an extremely hot Seller's market. The National news does not always match what is happening here. Keep that in mind when making an offer. Offer Strong!

9. Believe It or Not - Your Goal Is The Same As The Seller - To Close With Ease!

When making the offer - consider the other side - what will they see and read into your offer? It seems like the purchase price is everything - but it is not. The terms and price matter as a package. Timing can be an important factor - consider being flexible with the closing date in your offer. Offer Strong!