• calendar_month August 9, 2021
• folder Tips for buyers

As I write this in August of 2021, the Southern California real estate market is going into its umpteenth month of being a seller’s market. With no signs of a change in the near future, it is important for buyers to arm themselves for battle as they head out to bid on their future homes. Below are three time-tested strategies you can use to stand out in a multiple offer situation.

#1: SUBMIT HIGHEST & BEST OFFER FROM THE START

This market is no place to play hard-to-get my friends. Sellers will not always counter or negotiate. Make sure you are submitting competitively from the beginning. Often, bidding wars are won by as little as $1,000 - $5,000. When deciding on your purchase price, ask yourself: will I be devastated if I lost this home over $1,000? 

#2 SUBMIT DU APPROVAL WITH YOUR OFFER

With multiple offers being the norm, sellers are weighing the strength of a buyer’s approval and ability to close now more than ever. There is a difference between a pre-qualification, pre-approval, and underwritten approval. You want to submit your offer with the strongest of the three which is “DU approval.”

During a pre-qualification, the borrower’s information is taken verbally and credit is not run. It is not as strong as a pre-approval where financials are collected and credit is pulled. A “DU” or “desktop underwriting” approval is strongest of all. It means all financials for the buyer have been collected, credit has been run, and additionally, the borrower's file has been run through automated underwriting. Submitting DU with your offers will give sellers peace of mind that you can close. 

#3 USE COVER LETTER NOT LOVE LETTER

Remember applying for jobs after college and having to customize a cover letter with each resume you sent out? Do the same with your offers! 

Use a “cover letter” to reiterate the benefits to the seller of working with you. For example, do you know that the seller needs time to find a replacement and you’re willing to let them rent back? Say that in the letter! Did you notice there are cosmetic repairs needed and you happen to be a contractor and will take house as-is? Mention it! This is your opportunity to tell the seller why you’re the best candidate.

Do not write a letter that’s ONLY about you. The seller will not be making a decision based on how much you loved the kitchen or because being a homeowner has always been your dream. It’s a financial decision for most sellers. It’s ok to share a few personal details, but you only have the seller's attention for so long. Use it wisely. 

Stay tuned next week for tips on writing effective letters with your offers.

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