Uncategorized February 10, 2022

What Else Will Win The Deal

First, I love a Leo meme…I could use this one with a different saying every day of the week, LOL.

We have discussed appraisal gaps and escalation clauses…what else is there? How can you put your offer on top?  

If you are a Seller sometimes there are unique circumstances when the other terms of the contract can be just as important, such as closing and possession.  If you are building a home, moving out of town or trying to find a new home timing can be key to making your life a little less stressful. Generally speaking a Seller will want to close on their current home prior to closing on their future home so the proceeds can be used as a down payment.  However, you might not be ready to move out on closing day and need possession after closing.  Being upfront with what you need as a Seller is beneficial to getting exactly they type of offer you want…and on the flip side being flexible as a Buyer can seal the deal.  Stating quick close and extended possession preferred or even putting a date you want to have possession until is helpful.  The Seller doesn’t have to take the highest offer price, they have the right to accept the contract that makes the most sense for them.  Historically, possession after closing comes at a cost. Specifically the Buyer’s mortgage daily rate multiplied by the number of days you will be maintaining possession. Things are changing now, as Buyers are fine with the Seller living for FREE up to 6 weeks after closing.  This can be huge for a Seller who doesn’t want to move twice, or store their possessions.  

As we have discussed before, a Buyer is entitled to an inspection and remedy period.  If you don’t want to waive inspection, you can waive the remedy period.  This just means, that the Buyer will not ask for repairs, essentially they are buying as is and using the inspection for their information and maintenance plan.  Unless it is a health or safety item that is a deal breaker, I always counsel buyers to go in this situation with the best intent.  Do not just say you are going waive remedy do it and don’t knit pick at the inspection.  Especially because in the current climate, the Sellers likely have a back up offer for the property.  

Buyer’s can also offer higher non-refundable, but applicable, earnest money. This means that in the event the Buyer doesn’t close or terminates the contract for any reason, there is no question that the earnest money remains with the Seller.  This tactic offers extra assurance to the Seller that even though you plan to inspect, you do not plan to terminate.  Normally a Buyer will deposit between $1,000-5,000 as earnest money depending on the list price of the home.  This money goes towards the Buyers cash to close and is refundable to the Buyer if they terminate under the contractual conditions of the contract. Making it non-refundable takes away some of the contingency worry. 

Buyer’s can pay their agent’s commission or offer money towards the Seller’s closing costs.  At the end of the day, the Seller is trying to net the most money with the best terms for their circumstances.  In Ohio, the Seller typically pays the commission to the cooperating Broker, thereby making the Buyer’s agents services free to the Buyer. 

Buy with cash…although as I type this I am laughing.  Not many first time homebuyers…or any homebuyer have the ability to do this.  Which makes it extremely difficult to compete with another offer that is cash.  That is a topic for another day, but it is an option if you have the means. 

Communication is key. Communicate with your agent what you are willing to do, how much cash you have to work with and your hard no’s. It is important for your agent to communicate with the cooperating agent.  Make a call…don’t just text or email, have a live conversation.  To much is lost in translation or can be miscommunicated. Remember teamwork makes dreams work. 

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