When you, a homebuyer, learn that the seller of the home you’re interested in is mostly motivated by how much money they’ll net, you’ll need to tailor your offer to make it more lucrative for the seller if you want to win. Here are three tips to help set up your offer:
1. Use an escalation clause. Beat the other offers without paying too much for the property by using an escalation clause. An escalation clause is simply a clause written into your offer that states you’ll offer a certain amount more than a competitor up to a cap amount. For example, your escalation clause could say you’re willing to pay $1,000 more than the next competitor’s offer, with a cap of $10,000 over the list price.
2. Cap the repair costs. During the purchase process, there’s always an inspection period wherein the buyer can negotiate the price of the property based on its condition. Sellers are often afraid that the cost of the repairs will be too much, so you could put a cap on those repairs to assuage the seller’s concerns. You can include a clause in the offer that states the buyer won’t request any repairs if their cost is less than $10,000, for example.
3. Provide a clean offer. A ‘clean offer’ means that you don’t ask for small concessions from the seller, like asking them to pay for your closing costs. This could also include refraining from asking to keep personal items, like appliances.
If you have any questions about these strategies when writing an offer, don’t hesitate to reach out to me. I’d love to hear from you.