In a very competitive Denver market, where most homes are receiving multiple offers, here are four keys to making your offer stronger than the Competition's:
1. The Price is Right: Normally the highest bid wins and low ball offers are a thing of the past in this current market! It is also very normal for the Seller's agent to call your lender and ascertain your financial strength before accepting your offer. Make sure your lender has all of your pertinent documentation so they can advocate for you and help "sell" you as a well qualified buyer.
2. Cash is King: If there are two (or more) roughly equivalent offers, a cash offer will win. With a cash offer there is no need for an appraisal and the home can close quickly because you are not dealing with a loan (lender).If all offers are being financed, then the Seller normally will take the offer with the highest amount of money down. Conventional loans are usually perceived as more desirable than FHA loans because a higher percentage of cash is being supplied by the buyer which can point to greater financial strength.
3. Flexibility - It is always a good idea to find out what is important to the Seller. Do they want to close in 30 days or do they prefer a longer closing? Are they looking for a Lease Back option? Try to write your offer in a way that reflects what is most helpful to the Seller. It also strengthens your offer if you do not have any contingencies - like needing to sell your home before you can close on a new home.
4. Be Aggressive - BE BE Aggressive: We have seen some very aggressive strategies the last few years in Denver - particularly around Inspections and Appraisals. These come with some risks and we always caution our clients to really weigh out their options before choosing these options. We have seen many offers where the Buyer chooses to waive the inspection. This means they are buying the home "as-is" and the Seller does not have to fix anything. This is obviously attractive to Seller's. If you go this route, a better strategy may be to buy "as-is", subject to inspection. This gives you the right to inspect the home and the ability to get out of the contract if the inspection reveals major issues without losing your Earnest Money. It still lets the Seller off the hook for repairs, but it protects you as the Buyer.
The second aggressive strategy we have seen is in the area of Appraisal. We have seen many offers where the Buyer agrees to pay the sales price they have offered even if the home does not appraise. This means bringing that money in cash. Most FHA loans will not allow this. Use caution if you want to use this strategy and make sure your Realtor has run solid comps so that you do not get upside down in your home from the start.
Good luck as you pursue purchasing a home in Denver. We would love to help you find your dream home!