It’s not always about the highest offer

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Home sellers obviously hope to get the highest possible price for their property, but oddly enough, it’s not always the highest offer that gets the house in a multiple-offer situation. There are in fact several reasons why sellers may choose to accept a lower offer and it helps for serious buyers to be aware of what these are, so as to be as prepared as possible when it comes to putting in an offer – here are just a few.

Home loan pre-approval letter

This can be obtained through a reputable mortgage originator such as BetterLife Home Loans. A pre-approval letter tells the seller that you have done all your financial homework, you’re ready to buy in a certain price range and you should have no trouble getting a home loan in a few days. This can be very attractive to certain sellers, particularly those who need to conclude a sale quickly and it can very often be the deciding factor even if you have offered a lower price. In fact, many sellers tend to prefer offers from prospective buyers with pre-approvals over “all cash” offers, which often prove to be quite tricky to deal with and are not always what they appear to be.

Fewer contingencies

The next type of offer which is likely to win in a “bidding war” is the one with the fewest contingencies. Most buyers will need to finance their purchase, so a clause saying that the offer is subject to the buyer being able to raise a home loan is pretty standard. However, should a potential buyer’s offer also be subject to their being able to raise the cash for a deposit and transfer costs, for example, or first being able to sell their existing home, there’s a higher chance that they’re likely to lose out to buyers whose offers are not so encumbered.

Having said that, there are some sellers who actually prefer the sale process to go quite slowly. One reason for this could be so that they can stay on in their home, perhaps until the end of a school year or until a work contract ends so that they are ready to move to their new home. These sellers may of course be more responsive to offers from buyers that are prepared to accommodate their timing.

The promise of care

In addition, sellers who are very attached to their homes or perhaps have painstakingly restored a historical monument, may prefer offers from buyers who promise that their property will be in good hands. The promise of care and respect should not be underestimated, even if it comes from a potential buyer who has offered an amount that is lower than other offers. Having the reassurance that their beloved home will be taken care of and that its architectural heritage will be respected can often mean more to the seller than how much they end up selling it for.

It can be very useful to prospective buyers to bear these points in mind when it comes to them making an offer to purchase. Having said that, it’s important that they don’t put aside any doubts they may have about the home’s condition in order to get the home they want. If they have the slightest suspicion that there may be some hidden defects, they should make their offer subject to a professional home inspection – after all, they wouldn’t want to look back and regret not insisting upon this, especially if there are major problems that could have been solved before the sale goes through. Do what you can to secure your dream home, but not at the cost of it being in the condition you desire from the start.

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About BetterLife Home Loans

Since 2003 BetterLife Home Loans has been SA’s No.1 Bond Originator, handling the entire home loan application process on your behalf – free of charge! Our aim is still to source the best interest rate for you by submitting your home loan application to all the major banks. There is no easier way to apply for a Bond or Home Loan in South Africa!

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