Writing a Strong Offer | The Reference Blog
Thanks for tuning in to another episode of The Reference Blog. A couple weeks ago we did a quick blog on the buying process and I had a handful of people reach out to me and they were kinda asking about that "strong offer" step that I mentioned. A lot of first time home buyers, or folks that are selling your first home, you might not really understand what that means when it comes to the right, or best types of terms in a offer. So, I wanted to just give you the quick five things that I think are really important in an offer if you are trying to land your property in a hot market.
First step is we HAVE to get really clear on the price, right? So, when you're writing an offer, depending what time of year it is, we either have a buyer's market or a seller's market. You should watch our video on the market that we just did a few weeks back and you'll kind of learn a little more about (sellers and buyers markets ) -- it's based off the amount of inventory. But, ultimately if you found the house that you really, really like, you gotta get really clear with your agent on pricing. If you're trying to low-ball and it's a really hot market for sellers, you're not going to be considered. It doesnt mean you cant low ball, but just get ready for some bad news. So, just make sure you're being aggressive! Doesn't mean you have to overpay for the property, but just keep that in mind. Talk it over with your agent. Make sure they pull up some comps and kind of prove that the market is either really, really hot or a little bit slower.
Keep in mind too that days on market is very, very important. And for you non-real estate aficionados out there, all that means is how long the home has been on the market. Days-on-market. So, if the house just hit the market, it's the first weekend, if you saw that open house was really, really busy when you checked out the property or your showing, there was multiple groups through. Chances are, if it's priced right, that house is gonna sell. It's gonna sell over what asking and it's gonna sell fast. And so, get with your agent again and make sure that we are getting really, really clear on pricing. Cool? So, that's step one.
Next step, we gotta pick some really strong timelines. So, we've closed deals as fast as two or three weeks. Obviously, we got to make sure our financing is tight. Which also is part of our contingencies section that we'll hit on next. Those timelines can be really, really aggressive and really fast, which most seller's might potentially benefit from. But, some might not. So, consider all those options we talked about before.
Maybe you have to move. You have to consider you know, breaking leases all that type of stuff, right? So, when it comes to these timelines, should have the inspection done relatively fast. (if you're doing one ) So, just keep in mind that those timelines have to be really, really tight. PS that means really close together. and obviously, if I wrote an offer and it's a hot market like we've been talking about, and I say, "Hey, we're gonna close in four months" that might be a little too long, right? A standard closing is usually around 30-45 days and if it's a little bit of a hotter market. If there's more moving parts, like people are selling and buying and there's more transactions involved, sometimes that can be a little bit longer. Just keep that in mind when you're thinking about your timelines. And that's step two.
So, another step in writing a strong offer is getting all of your contingencies in line. First off, before you do that, you need to know what the hell is a contingency, right? There's a handful of things when you make an offer, you can make your offer subject to this list of items that either YOU have to clear or maybe the seller has to clear. Everyone here typically has their offer subject to financing and that means you're gonna get a mortgage on the property.
There's also a home inspection. A lot of people do home inspections, it's one of the best things you can do when you buy a home. Some people maybe waive the home inspection. As agents, we want to discuss that well a head of the time with our clients so they are informed on strategies. Maybe if the properties perfect, we can go ahead and say well, let's waive the inspection. and you can still do it down the road, but maybe it's for information only. It could be like that manual for you and your family to kind of know more about the house ( we talked about this in another blog / video )
Another couple of contingencies out there are pest and radon. So, just again, talk to your home inspector. Talk to your real estate agent. Get that stuff aligned well ahead of the time, so you know when you find that right property, you have a little bit of education of what's going on as as you go to write that strong offer. This is one of the most important items I look at when im teaching my sellers about offers to potentially accept.
One of the next steps is kind of considering all factors. So, coastal community here, like Winthrop, insurance can really jack things up, right? So, we've sold homes before where flood insurance is four, five, six, seven, eight, even $10,000. So, if you have a budget of maybe $500,000, all of a sudden you have maybe a $10,000 flood insurance bill combined with your regular insurance. That's a pretty hefty payment you have to make into your escrow account or the bank account that the mortgage company uses to make sure all your bills are paid for the property. So, that's pretty important to find out well in advance.
So, typically while we're in the offer writing process, we're gonna go ahead and check on your behalf. Either we'll run quotes for you through a couple of our local vendors that we use here in town or people that we've shopped with in the past. Or, if you have an insurance person, reach out to them! Run the address by them. Get that back very quick if you can because that really will change the some our next steps. Maybe you don't write it. Maybe you're very comfortable with the pricing that comes back and so we can continue to move forward and write that offer.
Last step! Who is involved in the transaction? So, here at Ledge & Young, we have a handful of agents working in the firm. We have a transaction coordinator, actively hiring an office assistant to help support us, & I'd love to be able to represent you either buying or selling property. So you want to make sure you have an educated agent. Again, we've mentioned it before in other videos, some real estate agents might only sell two or three houses a year. So this year we'll sell close to 50 homes here on my immediate team.
So, if you have any questions about buying or selling real estate here in the Winthrop, Ma or the North Shore ( And now South Shore) market, feel free to reach out to me direct at Seth@ledgeyoung.com or you can visit sellinboston.com and thank you for tuning in & reading another blog on The Reference.
If you want to keep learning more about real estate from Seth, make sure you subscribe to The Reference YouTube channel and follow us on Instagram and Facebook. If you have any questions about real estate, you can contact Seth at 781-342-0052.