I'm buying in one of the hottest housing markets (California). Been looking for over 4 month, recently made an offer (Single family house, 15% down, 23-day closing, $5K escalation, $20K earnest money, pre-inspected, financing and appraisal conditions waved) and lost to a lower (!) all-cash offer. Maybe my escalation step of $5K was not significant enough for the seller to even bother. Maybe it is the fact that I did not explicitly clarify that I had some flexibility with my finances and could cover the difference up to 5% of the cost should the appraisal come in lower (my lender only requires 10% down, so I had that extra 5% on my hands). I don't know. But it broke my heart and I don't want it to happen again.
It IS hard to beat cash offers, but I don't believe it's impossible. I'm turning to you, the mighty collective wisdom, for tricks of the trade, which can help put together the best possible offer within restrictions imposed by financing and common sense. Exact wording of the clauses you added to the contract would be a great help!
Here are my thoughts so far: 1. The best offer is short, sweet and simple. The fewer conditions and clauses, the better. 2. Escalation step should be big enough to incentify the seller to even consider our financed offer when there's also a cash offer on the table. Anything below $5K is a joke. $15K is nonsensical. The truth is probably somewhere between the two? 3. If the house is not vacant, I'd consider offering a rent-back up to X months.
*My agent is FANTASTIC at opening doors. Aren't they all?
Thank you very much for all your help and ideas!
More real estate tips at Program Realty Wix site