We all know the real estate market in Florida has been on the rise. From out of state travelers moving here, in addition to the recent low interest rates, the combination has led to a bull run in the real estate industry in Florida. Knowing how to get an offer accepted during this strong sellers market will be beneficial as you will likely be competing with a few other buyers for the same property.
How do you make your offer stand out? Well here are my favorite tips that should get you in the right direction of your offer being accepted for the Florida Market.
1. Submit Offer At Full Listing Price or More
There really is no secret here, submitting an offer at full price or just a bit higher will automatically increase your chances. This isn’t the time to be negotiating the price. It may be easier and beneficial to submit the offer at full ask or even higher. It may be a waste a time to be submitting offers even just a little lower than ask price. Some circumstances will be presented that this is possible.
For example, if a home just got back on the market because buyers financing fell through, there is a chance, you can come in quickly with a slightly lower than ask if your offer is strong.
A strong offer means that the offer is fully backed by financial documentation, the offer is at ask price or more, and the offer can close quickly. If you meet this criteria, you may have a chance to get a property just a little lower than ask price if the property just went back on the market and the seller just wants to sell it and move on.
However, even though this is unlikely to happen, you may be presented with this situation, and if so, be sure to try and capitalize on it.
2. Locate Overpriced Listings
One of the ways buyers are getting there offer accepted is by bidding on properties no one wants. There is nothing wrong with the house, it is just the price that is scaring away the buyers. In this case, that is a good thing. Find a home, or have your Realtor help you find homes that have been on the market for about 20-35 days. Usually this will indicate the home is overpriced or something isn’t just right. Either way, most of the time it’s overpriced which is good, because it likely won’t result in a bidding war atmosphere.
For instance, if you found the perfect dream home, and it is a great deal, it is likely many other buyers are thinking the same thing. Perfect atmosphere for a bidding war. However, if the home is perfect but overpriced, buyers may move on. This is good, because then you can come in with a respectable and reasonable offer. And if so, you will likely be the only one.
As a result, you might have a better chance at negotiating and getting the offer accepted.
3. Appraisal Waive Clause
At the moment, in some areas in Florida, sellers are pricing their homes above the appraisal price, and yet buyers keep buying. The appraisal price is the amount of value the property is worth. And if financing, is the max amount the company will lend you. For example, if a home is worth $300,000.00 but the appraisal comes in at $280,000.00, then the buyer will have to either come up with the extra $20k, or you can walk away if contract allows it. Right now, to help get an offer accepted, it may be best that you agree that you will not walk away if appraisal comes in under, or at least have in the contract that you will come up with the difference. Also known as the appraisal gap value.
This will tell the seller that even if the appraisal comes in low, you will still be able to close. Of course, make sure you have the financials ready to show proof that you can come up with the difference, at the time of submitting an offer. So either waive the appraisal all together, or have in the contract that you agree to come up with the appraisal gap value. I would recommend of course, to have an attorney look it over along with having a limit on how much you can cover.
For example, agreeing to come up with the appraisal gap value up to $20,000. This means, at least from my understanding, that the buyer will be on the hook for $20k, but not anymore than that, and if so the buyer can walk away.
After Getting An Offer Accepted, Time to Close
Once you received the offer back signed from the seller, the contract is official. Now is the time to breathe a sigh of relief and start finding the next step to close. This could mean ordering the inspections or making sure the escrow deposit is deposited in time. Make sure to stay on top of the timing as your contract will have specific dates of which inspections and appraisals need to be done by.
If your offer has the appraisal waive clause, make sure to have enough cash sitting aside to make sure you can come up with any extra at the time of closing. After the inspections, you will then have the appraisal ordered and then the clear to close. Congratulations, you now got an offer accepted in a sellers market in Florida!