San Antonio is currently enjoying a lively real estate market, with rising house prices and favorable conditions for sellers. Homes are being listed at higher prices, they’re getting multiple offers, and buyers are competing hard to get the houses they want.
As a buyer delving into the San Antonio housing market, this can be intimidating, especially if you’re on the verge of buying your dream home – or an awesome addition to your investment property portfolio. But there are many ways you can make your offer on a San Antonio home more competitive – and significantly increase your chances of success.
Increase the Price
Let’s start with the most obvious tip: increase your offer. There are many variables a seller must consider when reviewing offers, but there’s no doubt that price is one of the most important. Oftentimes, sellers will simply throw out any bids that aren’t close to the highest purchase price on the table. They’ll also instantly gravitate toward the highest bid available, regardless of the other factors at play.
If you can be the highest bid in the mix, you’ll have a much higher likelihood of getting the property. Obviously, the downside here is that your high bid could break your budget, undermine the profitability of the investment, or otherwise put you in a worse financial position. Plan your finances carefully and understand where your upper limits are.
Add an Escalation Clause
If you’re willing to go a bit higher on a property that stands out to you, consider adding an escalation clause to your bid. Essentially, an escalation clause is a potential path forward if someone else outbids you.
For example, you could make an offer on a home for $250,000, with an escalation clause that extends your offer to $275,000. That way, if someone bids $270,000 for the home, you’ll still have a chance of winning the bid. It’s a convenient way to increase your spending range without leaving you on the hook for too much money if there’s no competition.
Offer All Cash
Sellers are often looking for the smoothest, most straightforward path to closing. They tend to prioritize bids that make their life easy – and seem to offer clear, hassle-free terms. The best way to appeal to this type of seller is to make an offer all cash. In other words, you’ll offer to buy the property outright.
Not all people are in a position to do this, of course. But if you can drum up the funds necessary to purchase the house in cash, you’ll instantly make your bid seem more attractive. You can always refinance the property later if you want to regain access to that capital.
Improve Your Position as a Borrower
If you’re unable to offer all cash for a property, you could also improve your position as a borrower. Looking more financially stable will make you seem more attractive to the seller and make your bid seem much more compelling.
There are several ways to improve your position as a borrower here:
- Get preapproval. First, make sure you get preapproval for your loan. It’s a good financial step to take no matter what, since it will help you figure out what you can afford and what kind of loan you qualify for. But including a letter of preapproval with your offer will make the sellers take your offer much more seriously.
- Seek a conventional loan. If possible, try to get a conventional loan. There are several special loan programs that can help you get a loan if you struggle to qualify for conventional, but on paper, a conventional loan simply looks better.
- Improve your credit score. If you have time before your San Antonio home purchase, you can work to improve your credit score. A higher credit score will make you seem more financially trustworthy in the eyes of the bank; you may qualify for a larger loan or score a better interest rate. Ultimately, that can put you in a better position to make an offer on a home. However, it often takes months of consistent on-time payments and paying down debts to increase your credit score, so it’s not a quick fix.
- Put more money down. You should also consider saving up more money to use as a down payment. If you can’t afford to pay for a home all in cash, a large down payment is the next best thing. Most loans require a minimum down payment of 5 percent, but you should aim for 20 percent if you want to stand out.
Waive the Inspection (and Contingencies)
If you really want to stand out from the crowd, you can consider waiving the home inspection. This is a risky move, since the home inspection is your best chance to find out what’s structurally wrong with the property before committing to a buy. However, if you have reason to believe this property is in good condition, it may not be a major concern.
You could also waive contingencies. In other words, you can commit to buying the property without any additional requests for repairs or changes, and without any additional protections (like financing contingency).
Be One of the First to Bid
Though subtle, you can usually increase your chances of winning the bid for a San Antonio home by being one of the first ones to bid. Getting your foot in the door early can help you stand out. Try to view and make offers on properties as quickly as possible.
Write a Letter
If you want to increase your chances a bit more, you can consider writing a letter directly to the homeowner. Explain why you’re interested in this property and what you hope to do with it; you might persuade them to take your offer more seriously.
Are you interested in buying a home in San Antonio? Do you need help finding the perfect home, or better understanding the home buying process? Green Residential can help. Contact us today for a free consultation!