How to Get the Best Deal on a Home

Looking for the best deal on your next home purchase? Here are 4 tips to help you get the best deal.

1) No financing contingency

If you pay cash or remove any financing contingency from the purchase agreement then chances are good that you will get a better price. Put yourself in the shoes of a seller. Wouldn't you take less for your home if a potential buyer removed any financing contingency from their offer? Most sellers would.

When there is a financing contingency in an offer there is always that risk that the buyer can cancel the purchase. Maybe the property won't appraise out. Maybe the buyer will lose their job. Maybe lending guidelines change and the buyer cannot get a mortgage. This uncertainty can be unsettling for a seller.

2) Quick closing

Who is more likely to get a better price - a buyer with a closing in 3 weeks or one who wants to close in 2 or 3 months? Most sellers want to get the process over quickly and move on with their lives. Buyers who offer a fast closing tend to get a better price with those sellers who are prepared. Some sellers are unprepared and do not want to close quickly. Those sellers are unlikely to give a better price. However, most of them like getting it over with.

3) Large Escrow Deposit

Let's say you are selling a home and your asking price is $350,000. Buyer 1 comes to you and offers $325,000, is pre-approved for a mortgage, wants to close in 4 weeks and puts $15,000 in escrow. Buyer 2 comes along and offers $330,000, is pre-approved for a mortgage, wants to close in 4 weeks but only puts $2,000 in escrow. Which buyer would you take? Even though buyer 1 is offering less I would still work with them.

In the grand scheme of things $2,000 is not much money. Imagine taking buyer 2. You sign the contract and then figure out where you are going to move. Then you price out 3 movers. Pick one. Pack all of your belongings in boxes. The movers come and put it on the truck. You then go to closing and the buyer does not show up and decides not to close. You get to keep the $2,000 escrow deposit. Woop dee do! That probably does not even pay for the mover. A larger escrow deposit will typically get you a better price.

4) As-Is

Sellers who have previously gone through a home sale where there were lots of repair problems will usually give a better price for an as-is contract. The thought of making a bunch of pain in the neck small repairs to satisfy a picky buyer can bring on a huge headache.

"This is not fixed right!"

"I am not happy with this repair!"

"This is not fixed right so we will have to delay closing!"

"There is a slight leak in the kitchen faucet!"

Many sellers will give a better price if they don't have to make any repairs. Imagine being a seller and buyer 1 will give you $450,000 but asks you to fix everything up to $5,000 or buyer 2 who offers $445,000 but will not make you fix anything. If your home is new or recently remodeled with very few repairs needed then you might take buyer 1. If your home is older with lots of little fixes  needed then you might take buyer 2.

Getting the Best Price

If you absolutely want the best price and can deal with these terms then make an offer with no financing contingency (cash offer), a substantial escrow deposit (5-10%), a quick closing (2-3 weeks) and an as-is contract where you are not locking the seller into make any repairs.

Give me a call at 941.812.6272 if I can help you buy or sell a property in Sarasota.