Contracts: The Secret to Getting the Home
People often ask me why some offers get accepted, and others don’t. They continue thinking that someone just offered to pay more than they did. The reality is, winning can be about so much more than just the price!
Winning is all about how the seller sees things. They’re trying to decide between who is going to pay them the most money and who is going to be the safest. The money is easy to figure out. You take the highest bidder, and you can stack contracts in order from highest to lowest. But what does this seller see as safe? It’s much more complicated. The seller’s probably planning on using that money from the sale to buy something else. If it doesn’t close as planned, they won’t get to buy their new home.
Here are the top three things to consider when writing your contract.
Closing Timeline
The first is speed to close. Of all the offers on the table, who can settle the fastest? If you can close in 15 to 20 days and every other contract needs 30-45, you can get the seller their money faster, alleviating their stress.
Contingencies
Number two is contingencies, also known as “only if” clauses. You tell the seller, “I want to buy your house but only if my financing is good” or “only if the home appraises.” If things don’t work out, that contract can be canceled without risk to the buyer.
The most common contingencies are home inspections, appraisals, and financing. Sometimes it is not only the fact that you have contingencies but how long it takes to complete them. You stand out if you can clear your contingencies in 5-10 days and everyone else needs 14-21.
Remember, a contingency means you, the buyer, have a possible way to back out without risking your contract deposit!
Your Team
And number three, the factor that most people might find surprising is your team. Who is helping you fulfill that contract? While your offer shows your willingness and desire to buy that home, the team you employ to assist you highlights your ability to perform and close the deal.
Real estate is a business of relationships. It’s not just me, your loan officer, who needs to have a reputation for closing on time. There is your lender’s appraiser. Do they know and understand the local market? The real estate agent. Do they have a good reputation among other agents and are known for getting things done?
Your team needs to be made up of people who understand all these factors discussed here, which is why I surround myself, and you with top Realtors in the local market. Buying a home in hot markets is not the time to use your best friend who just got into real estate last year, your part-time relative, or even one of those “click here and get a Realtor” website-driven connections. Simply said, experience matters!
The Baltimore-Washington, DC Metro area has been one of the hottest housing markets in the country these past few years. I can tell you with great certainty that our borrowers win more as a direct result of how we structure the purchase contract. If you are thinking of buying a home, please schedule a consultation so we can help you win!
