Hey buyers! I know life is stressful for you right now with the current market. Whether you are working with me or someone else I am sure you have put in at least a few offers and had them rejected. If you are under contract or recently purchased and did not write multiple offers you are very lucky!
For the rest of us, I thought I’d share a few unique clauses that can make your offer stand out. Some people think it is all about the money when in reality each offer is taken for what it is and if there are other offers on the table it is compared to the other offers. Ever watch the Mr. Universe competition? If you have than you know what direct competition looks like when it is not head-tohead. See the YouTube video below and watch how the guys compete on stage.
So the compliance and lawyer nuts require some disclosure here. Note that I am not a lawyer. If I am not your agent currently I will not accept liability for these recommendations if you use them. Any clauses like I am suggesting are to be used in the right situation for the right offer and written by a professional. If you use any of these on your own or with another Realtor AND it goes poorly I have and will take zero liability. On the other hand if you have used one of these or another and it worked, please let me know.
This clause allows you to bid up the price by a set amount while not having to go too far above. Simplified language would be “Buyer agrees to pay $1500 above other offers up to a final purchase price of $150,000”. There is more I would add if using this for a buyer for less liability but you get the point.
This allows you as the buyer to write an offer contingent on an inspection and tell the seller that you will not hold them liable for items up to a certain amount. Sample language would be “Buyer agrees to pay the first $500 of defects that arise from the home inspection.”
Non-refundable earnest money:
Everyone gets all scared about the phrase "non-refundable". Are you serious about purchasing? Then you’ll make it happen. This clause can be phrased many ways. The best one I have seen is as follows “If buyer does not close this transaction for any reason other than inspection related defects that buyer and seller cannot come to an agreement on, buyer shall forfeit earnest money to seller”. Some people get more bold and phrase it this way “If this transaction does not close for any reason earnest money shall be forfeited to seller”. Now you have to choose how much earnest money you’re willing to loose…
This is a good one if you have plenty of cash and you are bidding significantly over the list price. For those that do not know, when you have an appraisal the bank will not complete a loan for more than that amount. So when the appraisal comes up short sellers either lower the purchase price or buyers have to bring more cash to closing to make up the difference. The appraisal guarantee tells a seller you are serious and states that if the appraisal comes in short that a buyer will make up the difference and close. This is what it looks like: “If the property does not appraise in value buyer agrees to make up the difference and bring the extra cash to closing”. Another way to do it is: “Buyer will make up the difference in cash value up to (X amount) if property does not appraise in value”
As always discuss with your Realtor and make sure you use any negotiating tactics in a responsible manner. These are just four options buyers have to make their offers stand out if they cannot necessarily complete on price alone. All of these tactics make your offer stronger and thus more appealing to sellers and when used in the correct fashion will help you get under contract.
-Dylan A. B. Diersen
First Weber, Inc
Dylan has been quoted on by national news outlets and has multiple designations recognized by the National Association of Realtors. Also, he has consistently helped more people achieve their real estate goals by increasing service. You can see more blog posts at FoxCitiesProperties.com/blog or keep in touch on Facebook at https://www.facebook.com/WisconsinRealEstateExpert/