Trying to compete in the market over the past two years has been a tough road for buyers getting a mortgage loan. Some buyers would have preferred to take out a mortgage and conserve their cash, but given market conditions, they felt pressured to make an all-cash offer to have a strong chance of winning.

1. Full underwritten approval

The time to submit all of your documentation to the lender is before you find a home that you have a massive sense of urgency to put an offer in on. This also makes the loan process go so much faster — the time waiting on compiling and sending documents nearly vanishes, and you can order the appraisal immediately.

2. Giving context

Having a lender who will personally pick up the phone and contact the listing agent is an absolute must in today’s market. The lender will be able to speak more in-depth and give the listing agent assurance about the buyers and their process so everyone can expect a seamless and fast-moving process.

The buyer’s selection of a lender is critically important because of this, and buyers should counsel them on the importance of that decision.

3. Contingencies

If a buyer has the ability to shorten the timeframe for loan approval, that could be viewed favorably by a seller. Appraisal contingencies are often the biggest hang-up for a seller with respect to financing as it is uncertain for both the seller and the listing agent in tying the home up, off the market, while waiting for the appraiser to come out. If the buyers are able, they should consider waiving the appraisal contingency if they are in an uber-competitive market or can try negotiating to guarantee they will pay a certain dollar amount over appraised value should the property not appraise at the agreed-upon sales price.

4. Escalatory addendums

On the surface, they appear to up the ante, with the buyer offering to top the highest offer by a certain dollar amount at a price not to exceed a certain amount. However, the reality is: Unless the buyers are willing to guarantee that they will pay the price resulting from the escalatory addendum, these addendums don’t mean much — particularly in a very competitive, multiple-offer situation.

If the buyer is getting financing, these addendums are viewed as vehicles to artificially take the home off the market unless the buyer will commit to the price no matter what happens with respect to the appraisal.

Buyers may be better off offering a strong asking price that they can realistically afford and their agent presenting their offer from this standpoint with the assurance they will get to the finish line versus a pie-in-the-sky offer that may be used to tie up the home — only for it to come back on the market several weeks later should the property not appraise.

5. Post-closing occupancy by seller
One of the biggest contractual terms that remains highly attractive to sellers is the ability to close in a normal timeframe, ranging from a couple of weeks to 30-45 days. It’s appealing to be able to stay in the property for a negotiated period of time.

6. Cash-backed offer programs
To respond to the challenges facing buyers getting mortgages in the current climate, companies like Homeward and Knock, among others, have been on the cutting edge of reinventing the loan process so that buyers can make cash-backed offers while obtaining their financing through one of these companies.

This levels the playing field for buyers getting a loan and includes appraisal protection.

7. Well-written offer
Buyers are up against a tremendous amount of challenges today — from low inventory to climbing prices as well as interest rates. Agents need to do all they can to ensure their buyers’ offers will be given every consideration, which means preparing a very detailed, thorough and accurate offer. Ensure the offer and related addenda as well as lender approval letters and proof of funds are included.

Call us at (480) 205 2234 for your pre-approval and mortgage needs.