How To Compete

Over the last few years we have seen a challenging real estate market and many buyers are feeling discouraged and frustrated.  And rightfully so.  It is a mad dash to see the newest listing, and then, you have to decide quickly if you want to put in an offer.

As a listing agent, I am going to tell you about a few things you can do to make your offer stand out. This is a very general overview, so please reach out if you’d like to talk in detail about these suggestions.


The agent you are working with definitely has a big impact on your success.

I can’t tell you how many times I have received an offer in my email (or my spam folder) and I never got a phone call from the agent to confirm I that received the offer. This is a big red flag! Your agent should call the listing agent immediately after you tell them you’d like to write an offer on a property. They can find out what is most important to the seller and can also tell the listing agent about your situation and how well qualified you are to buy this house. But this conversation will also show the listing agent that they are competent, experienced and will do whatever it takes to make the transaction go smoothly for all parties. One of the biggest concerns for a seller is the contract falling through and having to go back on the market.

If your agent’s communication with you isn’t great, then chances are, their communication with a listing agent won’t be much better and that can make this process all the more frustrating.

Another very, very important aspect of your offer is who the mortgage lender is. The lender can make or break a home sale, and if the listing agent isn’t familiar with the bank or if it is a company that does not have a great reputation, that could hurt your offer from start.  Talk to your agent about lenders that they recommend and talk to at least 2 or 3 lenders to find the best fit for you.


The main terms of the contract include the sales price, closing date, and the home inspection, finance and appraisal contingencies.

Price: Obviously, your offer price has to come in strong. You can start lower price and then use an escalation addendum to compete against other offers.  But your down payment amount and your earnest money deposit are also important.

The more money you have to put down and the more good faith money you offer, shows the seller how committed you are to purchasing this home. For example, if there are two offers that have the same sales price but one offer is putting 20% down and another offer is putting 3% down, the sellers will likely lean towards the 20% down offer.  Same with the earnest money amount.  If one buyer is only offer $5,000 in earnest money, but another buyer is offering $10,000, the seller may choose the higher amount because it seems less risky.  A buyer will be less likely to void the contract outside of a contingency if they could lose $10,000 vs. $5,000.

Closing Date: Your agent needs to find out when the sellers want to move and you need to make that date happen.  If the sellers need a rent-back, offer it to them for free. The rent-back is usually 30 days or less, so this small offering does help your offer stand out, and honestly, sellers are expecting a free rent-back when there are multiple offers.

Talk to your lender to find out how fast they can get your loan through underwriting.  If you can go to settlement just a few days before any of the other offers, that might make a big difference to the seller.  A typical closing is about 25 to 30 days, but some lenders can do it as quickly as 18-20 days. But this all depends on your financial situation, so be sure to ask your lender about this during your pre-approval process.

Home Inspection: This is the first contingency buyers are most likely to waive when there are multiple offers. Sellers love it when there is no home inspection contingency.  And be aware, the “Info Only” inspection isn’t received any better. In the sellers mind, if it truly is for informational purposes, they prefer that you do that after you move in or after settlement.

Finance Contingency: The finance contingency protects you in case your loan is not approved.  If you have this contingency, you can void the contract and keep your earnest money.  But there is a caveat, the type of financing that you put into the contract (specified financing), is the type of loan that your lender has to reject. So, if in your offer you say that you are going to do an FHA loan and put 3.5% down, but change to a conventional loan at 3% down but don’t get the seller’s permission to make this change, you forfeit this contingency automatically.  

If you waive this contingency and then lose your job or the lender decides you no longer qualify for this loan, then there is a  very good chance you will lose your earnest money deposit.  When a buyer waives this contingency they are making a strong statement that they are very financially secure and they will get to closing.

Appraisal Contingency:  Lenders won’t allow you to borrow more than the home is worth. So if the the appraisal report shows a value that is less than the contract price, three things can happen:

  • The buyer can just void at that point and keep their earnest money
  • The seller can reduce the price to match the appraisal amount
  • The buyer and seller can negotiate to split the difference in some form or fashion.

But when things are really competitive, buyers will also waive the appraisal contingency.  Which means, the buyer is saying that no matter what the appraisal price is, they are going to buy this house.  In order to do, the buyer will need to have ample cash to make up the difference if the appraisal comes in low, or the buyer and their agent are confident there won’t be an issue with the appraisal.

Now, there is a way to retain the appraisal contingency but offer a little incentive to the seller by offering to pay an appraisal gap up to a certain amount.  It would look something like this:

“Buyer agrees to pay up to a $5,000 difference between sales price and the appraisal price, not to exceed contract price”.

If the appraisal is lower than the sales price by $10,000, you would only have to bring an extra $5,000, or because you still had the contingency, you could void the contract if the seller isn’t willing to cover the other $5,000.


This one isn’t used as often but you can select to use the AS-IS clause with your offer.  There are different options you can select under this clause.  But if you opt to take on any of the HOA violations, and remove any need for termite inspections and repairs, that will put you in good favor with the seller.



Definitely talk with your agent about strategies that they use in this market and definitely ask them how they communicate with the listing agent.

If you’d like to have a personalized consultation, please reach out. I’d love to walk you through this process and tell you about all of your options.  It is such a fun an exciting time to buy a home and I just want to make sure you are fully prepared to ensure your success!


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