What Most Home Buyers Get Wrong When Making an Offer

The real estate market right now is confusing for many buyers… but it’s also full of opportunity.

In this episode, we break down how today’s market can benefit both buyers and sellers, how supply and demand are shaping home prices, and why many buyers hold themselves back with outdated assumptions about credit scores and down payments.

We also explain why a strong pre-approval matters more than ever and how it can help your offer stand out in a competitive situation.

If you're planning to buy a home, this episode will help you better understand the market and put yourself in a stronger position when it's time to make an offer.

Transcript

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What, where, why, or when we'll all be explained like instructions to a game. If you've been searching for a home lately, you've probably noticed something frustrating. You'll find a home you love, you submit an offer, and then you hear those words from your realtor that no buyer wants to hear. Guess what? They've received several offers. Damn. And suddenly you're completing with several other buyers who want the exact same home as you do. For many first-time home buyers, this can feel discouraging and confusing at the same time. You might start wondering what you're doing, what you're doing wrong. Or maybe you feel like the only way to win this home is by dramatically overpaying for the property. Here's the truth making your offer stand out in a competitive market is not just about offering the highest price. There are several strategic ways to structure your offer that can make it much more attractive to a seller. So stick with me here on this episode. I'm going to break down some cool ways you can look at getting an offer accepted. Some things you may know, some things you may not know, but I'll walk you through several proven strategies that can help you significantly increase your chances of getting your offer accepted. Let's go. What's going on, everybody? Welcome to another episode. I am an entrepreneur, a modern loan advisor, credit, and repair specialist, and a former personal fitness coach with 35 years of industry. Throughout my career, I've been passionate about helping people grow, improve their lives, and build businesses that truly work. I've always believed in thinking outside the box, finding opportunities to understand obstacles, and focusing on the positive side of life, even when the path is tough. Each week I'm here to bring you conversations, ideas, and strategies designed to add real value to your life. Sometimes it's just me sharing insights from my experience, and other times I bring on guests who are doing incredible things and have wisdom worth hearing. Welcome to the show. I'm Coach Clarence. Alright, first let's talk about the market itself. In many areas today, we're experiencing a market which, in my opinion, is a mix of sellers and a buyer's market, but that's a whole nother video. Seller's market simply means there are more buyers looking for homes than there are homes available for sale. And conversely, because of rates, incomes, affordability, and inventory, we have a lot of buyers who are able to leverage various advantages as sellers want to get rid of their homes and move on to the next. Buyer's market, sellers market, that's all perspective and it's all how you approach it. Another video, like I said. But anyway, because of this, many buyers believe that they need a perfect credit score, a massive down payment, or extremely aggressive offer to even have a chance. But in reality, there are several practical strategies that can dramatically improve your odds of success. Let's start with one of the most important factors sellers look at when reviewing offers. The first one is obvious is a strong pre-approval. A strong pre-approval shows the seller that you are financially ready and capable of purchasing their home. It signals that a lender has looked at and reviewed your income, credit, assets, and overall financial profile. This is very different from a simple pre-qualification where maybe the lender looks at your credit score, he pulls your credit and he takes your word for it. Rookie stuff, I've done it, believe it or not. Yep. A pre-qualification is based on basic information that you provide. A pre-approval, on the other hand, involves a deeper review of your financial situation, like really the hours that you really were, the income you really have, your assets, all of that. So from a seller's perspective, a buyer with a solid pre-approval represents much less of a risk. Okay, sellers want confidence with that transaction that it will actually close. So if they're choosing between multiple offers that are backed by a strong pre-approval, which is all reputation best in a way, too, that can immediately stand out. This is why getting a pre-approval before you start seriously shopping for homes is one of the smartest steps you can take. Now, let's move into the second strategy. Submit a competitive offer price. Many buyers assume the list price is always the home's exact value. However, in competitive markets, homes are often priced strategically to attract attention and generate those multiple offers that we talked about earlier. This means the final selling price may sometimes end up higher than the list price. When you're working with your real estate agent and lender, it's important to understand the property's true market value, which both myself and the real estate agent can get a general ballpark so you have an idea of what you're doing. Also, looking at comparable sales in the neighborhood can help determine what similar homes have already sold for. If the property is receiving significant interest, submitting a competitive offer can dramatically increase your chances of being selected. I know a lot of times some agents will take low balls, see what you can do. A lot of times you're wasting your time. Come in strong from the beginning. Remember, a competitive offer doesn't always mean that you're being reckless. The goal is to structure an offer that is strong while staying within a price range that is comfortable and sustainable for you. That brings me to my third strategy that many buyers overlook: flexible terms. What does that mean? Price is important, but that's not always the only factor that matters to a seller. Sometimes the term of the offer can be just as persuasive. For example, a seller might need extra time to move into their new home, right? In that situation, a buyer who's flexible on their closing timeline may have a significant advantage versus the person who can close in two weeks who wants to get in there right away. Other examples of flexible terms could be including adjusting inspection timelines or being accommodating with seller requests. When buyers show flexibility, it communicates cooperation and makes the overall transaction smoother for the seller. In competitive situations, these details can absolutely make a difference in you winning that offer or losing it. Another strategy that some buyers use is adding a personal touch. What do I mean? Occasionally, buyers will include a letter to the seller explaining why they love the home, why they love the neighborhood, why their house stood out. Flattery is not a bad thing. They might share how they picture raising their family there. Maybe they're a veteran, maybe the seller has an affinity for veterans. There's all these little touches that may help. You know, we speak with the listing agents to try to get a feel for what the buyer is and who they are, or how much they appreciate the care the seller is put into maintaining the property. While this approach doesn't guarantee success, right? It can sometimes create an emotional connection, like, hey, they really see what we've done here. It's an option. For sellers who have lived in the home for many years, knowing the next owner will appreciate the property can really matter. Now, let's look at a real-world example that shows how strategy can make a difference. Recently, a buyer we had was interested in a property that has strong interest from several other buyers. Instead of submitting a basic offer right at the asking price, we discussed the strategy with the buyer. We suggested submitting an offer slightly higher above the list price to demonstrate seriousness and competitiveness. The goal wasn't simply to overpay or outbid people, the goal was to position the offer to capture the seller's attention while still leaving room for negotiation. Okay. Here's how the strategy worked. The seller accepted the offer and ultimately provided concessions we asked for that the buyer needed with closing costs. Why? Because they were able to get the price they wanted, and it worked out. The appraisal came in in the end, the seller got their full asking price. So it worked out on both sides, and the buyers still benefited from financially from the negotiated concessions. Everybody walks away happy. Now, this is obviously an example, and every situation is going to be different, but it shows that successful offers are often about strategy and not just price. Understanding how to structure your offer properly can create opportunities that a lot of buyers miss. Now, let's quickly talk about a few common mistakes that I see in competitive markets. One of the big mistakes is waiting too long to get pre-approved. When a home hits the market, those decisions can happen quickly. You're already late to the game if you're waiting until you see a house that hits the market and you're like, oh, I better go see if I'm approved where I'm at. If you're not prepared, you may miss the opportunity exact entirely, right? So another mistake is too many offers that are too weak for the current market conditions. Like again, don't have an agent who's the queen or the king of lowball offers. It becomes a bad reputation. No one takes you seriously. If several buyers are competing for the same property, a lower hesitant offer may not even be considered. And finally, some buyers focus only on price while ignoring the important terms and flexibility. Remember, sellers are evaluating the entire offer, not just the number on the purchase agreement. So let's recap the key strategies that can help your offer stand out. First, obtain a strong pre-approval before you start making offers. Number two, work with professionals to structure a competitor offer that reflects the market. Know your income. Know what you can do. Know if you can jump up a little bit. Know if you need seller concessions and how to present those attractively. Third, considerable flexible terms that may help the seller feel more comfortable about accepting your offer. And fourth, when appropriate, add a personal touch that helps create a connection with the seller. And one thing I do with my listing agents, I talk to them, ask a little bit about the seller. It helps us when we're crafting those offers. When these elements come together, your offer becomes much more compelling in a competitive environment. So if you plan to buy a home and you want to put yourself in the strongest possible position, preparation and strategy are essential. And if you found this information helpful, make sure you subscribe to my channel so you don't miss future videos where we break down the home buying process. It's your practical strategies for success. Can't even talk anymore. All right. So if you like personalized guidance for your situation, you can also schedule a consultation in the link below, and I'll walk you through your goals and create a plan that works for you.