Homebuyer looking to have your offer accepted? Consider these 4 steps

When you’re up against stiff competition to buy a house, these four tips can help you get your offer accepted. (iStock)

Although the coronavirus pandemic has had a significant impact on American’s finances, one silver lining is that it has led to rock-bottom mortgage rates. And for many, those rates have opened the door to homeownership. While mortgage rates have undergone a slight uptick recently, they are still at historic lows, which means that if you’ve been thinking of exploring the real estate market, now may be a good time. 

However, this increased loan eligibility has led to fierce competition among home buyers. According to the National Association of Realtors (NAR), available homes for sale received an average of three offers before going under contract in 2020, an increase from an average of 2.3 offers in 2019. 

With that in mind, when you find the perfect home, you need to do what it takes to make your offer stand out. To that end, we've brought you four tips to help get your offer accepted. Read them over to learn more.

When you're ready to start the mortgage process, consider visiting Credible to compare rates and lenders. They can also help you get in touch with an experienced loan officer and get your mortgage questions answered.

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1. Be prepared with a pre-approval letter

The first step in this process is to get a pre-approval letter from a mortgage lender or broker. This letter is provided by mortgage companies to show how much the buyer can afford to borrow for a home loan. It helps the buyer with budgeting and it also provides the seller with reassurance that the buyer can afford their property.

Your mortgage lender will look at your credit history, along with your income and debt ratios to determine how much you can afford to borrow. On your end, that means supplying them with a few years worth of financial documentation. Since this process can take a bit of time, it’s a good idea to take care of it before you start submitting offers.

To get started, you can visit an online mortgage broker like Credible to get personalized rates and pre-approval letters without affecting your credit score. And as you’re considering your budget, you should use an online mortgage calculator to determine potential monthly mortgage payments.

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2. Increase your deposit

In addition to having a pre-approval letter in hand, you can also make your offer stand out from the crowd by increasing your earnest money deposit. In real estate, an earnest money deposit is the initial amount of money you put down on the home. It’s submitted along with your offer and applied to your down payment once you go to closing.

Generally, submitting a bigger deposit shows that you are incredibly serious about purchasing the home. However, it's important to be careful when going this route because there is a chance that you could lose your deposit money if you decide to walk away from the deal.  

If you’re looking to purchase a home in today’s market, you can explore your mortgage options by visiting Credible to compare rates and lenders and get a mortgage pre-approval letter in minutes.

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3. Think about paying cash

If you can afford it, consider paying cash for the home. Usually, home sellers prefer cash offers when they are available because there is no risk that the buyer will not be approved for a mortgage program and be rendered unable to buy the home. Put simply, presenting a cash offer shows that you are a qualified buyer, which may put you at the top of the list if you're up against multiple offers.

That said, paying cash may not be an option for everyone, especially first-time homebuyers who may need to rely on down payment assistance programs to cover their closing costs. Still, if you’ve had considerable luck saving money, paying cash can be a great way to put yourself ahead.

4. Consider writing a letter to the seller

Lastly, consider writing a letter to the seller that explains why you want to buy the home. After all, the seller is only human and it is likely that they will have a positive connection to their home. Bringing a personal touch to your offer may be a way to set yourself apart from the crowd, especially if you can connect with the seller on an emotional level. 

Unfortunately, however, writing one of these letters can be a gamble. These days, many real estate agents are fearful to give them to their clients because of the potential that something in the letter could be cause for discrimination. With that in mind, it's important to go into this process knowing that there's a chance that the seller might not see what you’ve written.

The bottom line 

Ultimately, you never know what the seller's motivation is for picking one offer over another. As the buyer, you just have to make sure to put your best foot forward once you've found the perfect home. These tips can give you a great starting point, but don't hesitate to reach out to your real estate agent for advice as well.

When it's time to think about getting a home loan, consider visiting Credible to further explore your mortgage options.

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Have a finance-related question, but don't know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.

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