Money talks when you’re making an offer on a house, but sometimes it doesn’t say absolutely everything. If you are looking to buy a home in a seller’s market, a place where inventory is low and buyer interest is high, you might end up in a bidding situation. That means that the seller has received several offers on the house and will be sorting through them. While you may assume they would automatically pick the highest offer, that’s not always the case. Here are seven other reasons another offer might land in front of yours, and what you can do to move to the top of the pile.
You Didn’t Have Your Financing Lined Up
When you submit an offer, you and your agent want to make sure that you’re putting your best foot forward since this might be the first time your seller interacts with you, points out Elizabeth O’Neill of Warburg Realty. While you want all your ducks in a row, it’s particularly important to include a mortgage pre-approval, which shows exactly that – how much money your lender has approved for your loan. Some buyers go in with only a prequalification,” and that could make a seller leery that you might not qualify for adequate financing. “A prequalification is done with minimal information, while a pre-approval comes after an analysis of the buyer’s actual financials,” O’Neill explains.
Fix it fast: In today’s market, it’s always wise to get a prequalification before you even start looking so you can make a fast offer they’ll take seriously should the right home come along. Quicken Loans offers Verified Approval1, in which credit is pulled, plus income and assets are verified and analyzed. This allows potential home buyers to be fully confident in the offer they are making as they’ll receive a letter of approval within 24 hours of receiving required documentation.
You Had A Mortgage Contingency
Many buyers are in the situation where they need to sell their current house to get the funds to buy this new house. But a seller might not want to take the risk that your house won’t sell in a timely fashion and therefore might choose a non-contingent offer even if it’s lower, warns Alexander Boriskin of Douglas Elliman Real Estate.
Fix it fast: If you truly love the new house and don’t mind taking on some risk, you can remove the contingencies and hope your house sells. But just in case it doesn’t, see if you qualify for alternative financing such as gap financing, also known as a bridge loan, which is a short-term loan that you take out on your current home to purchase the new one. Make sure that this is a smart choice for your financial situation before going this route.
You Had An Inspection Contingency
Another common contingency is an inspection contingency, which means you are waiting on the results of the inspection before agreeing to buy the home. A seller might prefer an offer with no inspection so they won’t have to worry about potentially expensive repairs.
Fix it fast: In a crazy market, buyers have been known to waive the inspection and deal with whatever is uncovered later, but that is rarely advisable. But even if you insist on an inspection, sellers will prefer if you ask for a reasonably short inspection period, says Eddie La Rosa with EWM Realtors. Make sure it’s scheduled in a timely manner, say, a week or 10 days at the most.
You Needed A Closing Date That Didn’t Jive With Theirs
Most people assume a shorter closing is best, and often it is – everyone wants to get on with their lives. But sometimes sellers have another issue. For example, maybe their kids want to finish out the school year or they are waiting on new construction to be complete, notes Boriskin. “In those situations, a buyer who is willing to close in six months may be more attractive than someone looking to close in 30 days because the sellers won’t have to worry about an extra move or interim housing.”
Fix it fast: If you have any wiggle room in your schedule, make sure to indicate it. And it can be very helpful to have an agent who’s able to learn some of these details so you can write up an offer that meets the seller’s timing needs, whatever they may be.
You Asked For Too Much
You’re entitled to the fixtures, and there may be some major repairs that everyone agrees on, but beware of making too many requests, Boriskin says. “Sometimes buyers request appliances or a lot of furniture to be included in the selling price, or they have too many repair or replacement requests and the seller sees their bottom line is being sliced too thin.” Or they might just decide you’re too much trouble to deal with.
Fix it fast: Talk to your real estate agent about what is customary in terms of including items when you’re writing the offer. While some repairs might be necessary, make sure you prioritize so they don’t feel nickel and dimed.
You Didn’t See The Home In Person
When you’re planning a cross-country move, you might be looking at houses exclusively online – and sometimes that’s all you can do. But be aware that can harm your position, says La Rosa. “Sellers know it’s more common for an out-of-town buyer to cancel their offer because they might realize their expectations have not been met when they finally see the property.”
Fix it fast: Visiting the house is best if at all feasible. But if not, do everything you can to let the sellers know you have eyes on the ground, such as having a local real estate agent do a video walkthrough with you on the other end.
The Seller Just Liked Someone Else Better
Wait, really? Yes, believe it or not, emotions can play a huge role in what one might assume is a straight financial transaction, says O’Neill. If the seller lived in the home a long time or raised a family there, they may be overly invested in having their home go to someone whom they feel will appreciate it and take good care of it. “It could be anything that gives someone the edge; maybe the buyers are similar in life stage to the sellers when they first bought the house; or they like the same artist as the homeowner does, or maybe a diploma hanging in a corner reveals they went to the same college,” she says.
Fix it fast: Consider writing a love letter, as it’s called, where the potential buyer highlights a connection with a given home, reasons why they love it and why they would be the perfect new owners.
Ready to make an offer? Make sure you are confident in the financing you have lined up. Find out more here.
1Participation in the Verified Approval program is based on an underwriter’s comprehensive analysis of your credit, income, employment status, debt, property, insurance, appraisal and a satisfactory title report/search. If new information materially changes the underwriting decision resulting in a denial of your credit request, if the loan fails to close for a reason outside of Quicken Loans’ control, or if you no longer want to proceed with the loan, your participation in the program will be discontinued. If your eligibility in the program does not change and your mortgage loan does not close, you will receive $1,000. This offer does not apply to new purchase loans submitted to Quicken Loans through a mortgage broker. Additional conditions or exclusions may apply.