If you’re searching for a Boston luxury high rise condo, how do you submit the winning Offer and beat out the competition?
As we’ve reported earlier the pendulum is start to swing back in favor of Boston luxury condo buyers, In response to a glut of new listings, sellers have been forced to readjust overly bullish initial asking prices, which is music to the ears of many a Boston high rise condo buyers. However, at the end of the day sellers can reject an offer for a variety of reasons without offering an explanation.
Even when the market’s in your favor and you’ve found what you believe to be perfect, you haven’t crossed the finish line just yet. You still have to submit the winning bid, and that can be a hurdle of its own. The downside of not submitting the winning bid on the property you looked so long for is that you have to keep searching, which might bring you back to square one.
Here are six tips that will help you beat out the competition when you submit your bid:
1. Get Pre-approved and Submit Letter With the Offer
When you provide your pre-approval with your offer, it shows the seller that you’re serious. An offer without a pre-approval is the equivalent of going into a store without your wallet: you will not be taken seriously. The pre-approval process can take anywhere from 24 to 48 hours, so it’s essential that you have it ready to go when you find the property you want. When there are multiple parties interested in a property, nobody will be waiting for you to get your pre-approval.
2. Offer More Cash Down
The more cash you’re willing to put down on a property, the stronger your offer becomes to the seller. This reduces the risk of the loan falling through and also demonstrates your financial strength as a buyer. The more cash you’re able to put down, the more likely you’ll be to even beat out higher bids. For instance, if you’re competing with a buyer who’s looking to put 20 percent down and you’re willing to put 50 percent down, the seller might look to your offer as the baseline. The extreme case is offering all cash, which means you’re not financing the purchase. Sellers love receiving all-cash offers and will often leave other buyers’ offers in the dust, assuming they’re hovering in similar price ranges. Of course, every situation is unique and some sellers might be willing to sacrifice the security of the deal going through for a higher price.
3. Waive Your Mortgage Contingency
This move is not for the faint of heart and could be downright dangerous. However, if you’re 100 percent certain that you’ll have no issues getting financing, you can submit an offer without a mortgage contingency. This means that even if you don’t receive the loan, you’re still contractually obligated to close on the property. Either you have to come up with enough cash to make the purchase happen, or you’ll have to forgo your initial down payment that you’ll make when you sign the contract. The initial down payment at contract signing is usually 10 percent of the purchase price. If you have income stability, a high level of cash reserves and confidence that financing will be no issue, you may be in a position to submit an offer without a mortgage contingency. Another thing to consider, which has direct impact on this, involves the appraisal. For instance, if the property doesn’t appraise at the asking price, you may be expected to come up with the difference if you completely waive the mortgage contingency.
4. Be Agreeable to the Seller’s Terms
Sometimes sellers don’t actually want to close right away. This may be because they’re trying to figure out their own living situation, and by being agreeable and enabling them to be in contract with a late closing, this might be something that gives your offer the upper hand. Additionally, a seller may want you to close and rent the property back from you for a few months so they can close on their next property. By accepting these types of terms, your offer may stand out against the rest. It’s always best to attempt to identify whether the seller has any specific terms they’re trying to achieve, and see how you can best put in an offer that fulfills these goals. Make sure to keep your ears open!
5. Write a Nice Letter to the Sellers
Sometimes a heartfelt letter to the sellers can be the difference between scoring the winning offer and losing out. Definitely make sure to communicate the letter through the seller’s broker, as you want to respect professional relationships. Explain your situation and why this property is the one you can’t live without. Do detail the emotional connection you’ve developed with the property and perhaps your planned use. Some sellers do like hearing about how their property will be used and how it would benefit someone’s overall livelihood. It becomes a much more personal matter, and a seller might become invested in your story and future. However, don’t assume this works for every seller, and definitely don’t act entitled in your plea as to why you want to own their home.
6. Offer the Highest Price
While not the most creative of techniques, offering the highest price often seals the deal. However, offering the highest price without being a qualified buyer doesn’t mean much. Also you don’t want to offer the highest price and find yourself overpaying by an outrageous premium. Oftentimes, sellers and their brokers will take an initial offer and then come back looking for a best and final offer. Sometimes this can be a bluff, but it’s important to be strategic what the place is really worth based on comparable prior sales and existing inventory. Offering the highest price often gives you a leg up on the competition, but doesn’t guarantee the winning bid.
Boston High Rise Luxury Condos