Sometimes, in the midst of a humdrum home search, ~*magic*~ happens. You know how people talk about love at first sight? It happens with homes just about as often as it does with humans. You’re with your agent, checking out a number of listings that check off some, or even most of your boxes, and then BAM! You’ve found your dream home. It has everything you need, things that you wanted but knew that you couldn’t necessarily have, and it exceeds your wildest expectations for neighborhood, architectural style… the whole nine. You have a major house-crush, and you want to make it legal NOW. But, as you know, Philadelphia is experiencing a distinct sellers’ market, where the most desirable condos, townhomes, and houses can sell almost the moment they hit the market. You’re frantic. You know that there could be competing offers, and you want yours to make a splash. OBVIOUSLY the thing to do is hit them with an offer at a good chunk above asking price, yes? Because the highest offer always wins?
There are several reasons why your high bid might not win you the Philly home you’ve been dreaming of. Learn to recognize them so that, when you’re in the hot seat, you know exactly how to make sellers swoon.
You want (or need) to be in your new home within a certain period. Sometimes, it’s ASAP. Others, you need to wait a bit. Sellers also have an ideal time period for closing the deal, and it may have to do with whether they’ve already bought their new digs or not. Making an offer that doesn’t line up with the sellers’ desires can shutter the deal. Some buyers write contingencies into their offers stating that they need time to sell their own home before being able to close on a new one. A seller who wants a speedy, tight 30-day closing isn’t going to go for that, no matter how attractive the finances. Likewise, if you are chomping at the bit to move in, but the sellers have requested a longer closing period, things ain’t going to gel. It’s important to talk to the sellers’ agent and get a good idea for what timeframe they have in mind before you submit your offer. If you really want that Rittenhouse condo, you’re going to have to bend to what the sellers want.
If I’ve said it once, I’ve said it a thousand times: GET PRE-APPROVED FOR YOUR FUTURE MORTGAGE BEFORE YOU START HOUSE-HUNTING. It’s simply non-negotiable these days. When you make an offer, it is not the time to say, “uhhhh… we might have to iron some stuff out with the bank.” NO SELLER WANTS TO HEAR THAT! You can make sky-high offers all day long, but unless you have the down payment, closing costs, and mortgage approval in hand to immediately set things in motion, the sellers are going to roll their eyes and move on. (In the words of Queen Ariana, “thank you, next!”) If you have, in fact, been pre-approved, make sure that your letter is current… within no more than 30 days. Submitting something older could make sellers think that you are hiding something. And if you didn’t know already, make sure that you don’t make any major purchases (new car, anything financed) during the escrow period, as this can trigger problems at the bank and torpedo your deal.
A big number isn’t the only thing that sellers look at when they are considering offers. A well-rounded offer that makes sellers smile will go light on the contingencies and requested concessions. You may be offering $10k over asking, but you are demanding way more than that in closing costs. Or maybe the owners have specified that an heirloom chandelier in the entryway will not convey with the house, but you are demanding it anyway. Sellers want an offer that favors them, not you. You can’t just come barging in like a bull in the china shop that is a hot market and start making demands left and right. Any concessions you ask for should not dip into your seller’s cha-ching. So, if you offer that aforementioned $10k over, make sure that your demands don’t overflow that amount. You want an offer that comes off as sweet and competitive. Ask as little as you possibly can from the seller(s) if you want your offer to stand out.
Let’s get real: every seller thinks that their home is the most special one ever built. Regardless of cosmetic damage, neighborhood, school district, age, or anything else, they more than likely love their house and will be swayed by someone who wants to love it as well. One way to turn a seller off real fast is to walk through an open house talking about the walls you’d love to knock down and the bathrooms you can’t wait to gut. Maybe you are in fact buying a house with major renos in mind, but this is not something to share with sellers. You want them to know that you plan on loving their house as much as they have. To that end, you might consider including a personal touch with your offer. It could take the form of a “love note” to the sellers, or even a picture of your family so that they can put a face to the offer. Of course, if the current owner is an investor who just flipped a rowhome in trendy Queen Village, they probably aren’t going to care. But, to another family, knowing how well their home will suit your needs and how you would love to raise your brood there might just pull on the heartstrings – and pull your offer to the top of the pile.
At the end of the day, the number on the paper matters a great deal. I’m not going to pull your leg and pretend that it doesn’t. But there’s more to a successful offer than just hitting sellers over the head with the money hammer. You need to be positive that you can make your big promises a reality, and you also need to remember that sellers are human and not robots. If you steer clear of the pitfalls named here, you stand a great chance of snagging your dream Philadelphia home.