It is priced right and is receiving a lot of attention from other buyers. You don’t want to miss this opportunity so you are ready to put in an offer with the real estate agent immediately. What can you do to guarantee your offer is the one accepted?
Financially, offers can be broken down into three categories:
1.) An All-Cash Offer
A cash buyer is always favored by any seller. In today’s real estate market, an all-cash offer is even more enticing. An all-cash buyer eliminates the need for the bank appraisal; especially when appraisals have been coming in low.
2.) A Non-Contingency Offer
If you don’t have the cash reserves for an all-cash purchase, the next best thing would be to make a non-contingency offer. To do this you must be pre-approved for a mortgage and have your current house already under contract and thorugh inspections. This gives the seller the confidence that you are already a qualified buyer who will be able to complete the purchase. OR you already closed on your or you don't have anything to sell.
3.) A Contingency Offer
Some buyers start the process of looking for a new home before their current home is sold. This could be a big mistake. If you find the home you were hoping for (perfect for your family AND priced right), it will be very difficult to get your offer accepted because you are not actually qualified to buy.
Asking a seller to wait for your home to sell is somewhat unreasonable in today’s environment. One of the reasons you would want the home is because the seller priced the home at a value to sell it NOW. They want to know it is sold when they accept an offer. They normally will not even entertain a contingency offer or they will continue to show the house, give you a time limit to have your house sold and if another contract comes in you will be given the right of first refusal, whereby you eliminate the contingency or bow out.
Bottom Line
Unless you have the ability to purchase with cash, the best thing to do is to be pre-approved for a mortgage and have your current house already in contract or sold, before looking for the home of your dreams. That guarantees you will get the home you love at a price that makes sense.