Tired of Getting Rejected? How To Turn Your Next New Jersey Home Offer from a No to a Yes!

When you find a home that meets all your criteria and feels just right, it's time to pull the trigger. Be careful; other interested buyers may also be vying for the same property. Your offer could end up competing with other offers. Sellers often reject offers that they deem inadequate, even if yours is the one on the table, 

There's an art to getting an offer approved that goes beyond simply offering the highest price. Here are five tips to transform a rejection into an acceptance and seal the deal for your dream home.

1. Know The Market

Knowing the market increases your awareness of buyer activity and seller expectations when making offers. This involves understanding the initial asking price and how far above or below offers typically come in. This is critical in making viable offers and not overpaying for a property.

Awareness of factors like the absorption rate and the pace at which homes are sold indicates demand and determines a buyer or seller's market. Proximity to schools, attractions, and potential hazards can also be significant factors to consider. 

RightWay Realtor® Tip: To calculate an area's absorption rate, divide the number of homes sold by the total number of available homes in a specific timeframe. An absorption rate greater than 20% is associated with a seller's market, while an absorption rate below 15% is related to a buyer's market. 

2. Build a Team

Purchasing a home is a procedural, multi-disciplinary process with many specialist parties required for success. From reviewing contracts, inspecting the house, securing financing, and negotiating, the steps in a home purchase are often too big for one person, especially if real estate isn’t your job. Here's a list of the personnel you'll want on your team before you go house shopping:

• Realtor®: An agent is often at the center of the transaction. They provide market insights to make sure your offer is strong and well-advised, and they handle all of the negotiations. 
• Lender: To purchase a house, you'll need funding! A lender will help you structure the finances of the purchase, advise on rates, and inform you of programs that might be able to save you money.
• Real Estate Attorney: Unless you have extensive experience in real estate contract law, hire a real estate attorney. They will make sure you're protected and guided through the legal process.
• Inspector: When you purchase your house, you'll need a professional to scrutinize it and make sure there are no issues that could be dangerous or cost you money down the line. Be sure to hire a licensed inspector.
• Contractor*: If you're putting in offers on "fixer uppers", you'll want to hire a contractor to review the home and advise you on the cost of repairs. This will ensure that you're making a well-advised offer. 

3. Secure Financing Early

A savvy seller won't go under contract with a buyer who doesn't have the funds to transact. A seller's biggest fear is a buyer failing to get approved for a mortgage after a lengthy contingency process. When this happens, deals fall apart, wasting the seller’s time and possibly preventing them from getting their listing price from the next buyer. 

Many buyers get a quick “prequalification” from lenders based on their stated income and debts. We suggest getting a pre-approval instead of just a prequalification. While a prequalification is backed by reported income and credit, a pre-approval is verified by financial documents. Serious New Jersey buyers go to market with a pre-approval to show the seller that they're already approved for financing. Pre-approved buyers’ offers are much more likely to be accepted.

RightWay Realtor® Tip: If you're only getting a mortgage for part of the purchase price, be prepared to provide proof of funds (usually a bank statement) demonstrating you have the funds to cover the entire amount. 

4. Strategize and Stick To Your Budget

Purchasing a home is an emotional process. When buyers sense competition in the market, they begin to stretch their budget limits. When shopping for a new home, set a budget you can stick to. That way, you will avoid emotional decision-making, which leads to overextending yourself. Make sure your budget accounts for potential offers above the asking price. The mortgage payment could potentially increase, and if there is a difference between your offer and the appraised value, you might need to raise your down payment to cover the shortfall.   

In a competitive market, your best strategy is to shop under your budget. Speak with a REALTOR® to determine how much houses are selling for compared to their asking price. Adjust your budget accordingly to conceive competitive offers while staying within your means. Understanding your budget is crucial to ensuring that you can afford to keep your home once you secure it.

5. Waive Contingencies (With Caution)

Buyers in New Jersey often complain about entering into bidding wars and losing out to higher offers. If you want your offer to stand out, you may consider waiving certain contingencies. Contingencies are the conditions that must be met for a sale to be finalized. Consider the following contingencies and how you can leverage them:

• Inspection Contingency: Waiving an inspection contingency means that you'll take the house exactly as it is. You're waiving the right to perform inspections of the property before the sale. If you will waive the inspection contingency, have an inspector of your own perform an inspection before making an offer. 
• Appraisal Contingency: Waiving the appraisal contingency means that if you make an offer on the home, but it appraises low, you're willing to pay the difference between the offer and appraisal amount. To do this confidently, thoroughly analyze the property to ensure your offer is close to what an appraiser would evaluate. 
• Mortgage Contingency: Waiving a mortgage contingency tells a seller you will surrender your security deposit if you can't secure a mortgage. If you will waive the mortgage contingency, speak with your lender to ensure that nothing threatens your loan commitment. 

Proceed with caution — those contingencies exist for a reason. They tend to protect you, the buyer. Waiving them carries a risk that you should fully grasp before proceeding.

RightWay Realtor® Tip: It's always wise to consult a knowledgeable Realtor® before deciding to waive any contingency in your real estate deal. 

Conclusion

People buy houses in New Jersey all of the time. While it's not impossible, it requires strategy and forethought. The RightWay approach to buying a house successfully starts with understanding the goals and finances of a buyer, understanding the property, and properly setting market expectations. 

If you're ready to buy a home, call us today for a free consultation (201) 279-0958