June 4, 2018
Orion’s Account Executives continue to hear stories from our brokers about how challenging it is for buyers. In this tough environment where rates are ticking up and inventory is at a minimum, brokers should help buyers should step up their game. Knowing a few options that may give them a competitive edge.
Some of Orion’s brokers recommend using an escalation clause as a viable option. This clause states that the buyer is willing to outbid other offers by a certain amount up to a capped price. While this may strengthen an offer, there are some things to look out for. Both agents and the seller need to understand the clause and how it works. Be sure other offers are legitimate (bona fide). The increase needs to be realistic (is $1000 over highest bid going to be enough to motivate sellers?) especially if there are other important issues for sellers to negotiate, for example the closing date. Don’t forget the appraisal, if it comes in too low that could create other problems.
Some of Orion’s brokers see buyers hiring a home inspector for the day to attend open houses with them. The benefit is buyers may decide to wave inspection contingency, making for a stronger offer.
If a buyer is willing to wave the mortgage contingency (the buyer will forfeit their deposit if they cannot qualify for financing) and can make an offer more appealing. Of course, this option is a risk for the buyer.
Orion’s brokers have clients that are competing with all-cash offers, or refinancing a recent all cash buyer. Buyers can make a cash purchase, they always have the option of refinancing after the fact to pull their cash back out of the house. But before doing this, smart buyers speak with a broker to understand the process and timing.