Found Your Home!...Now What?

By Emilio Soto

In my previous post I wrote a “Checklist” of tips to help home buyers navigate through the NYC purchase process. There are a ton more tips I could mention but that would be an eyesore. Plus, let’s face it; I can turn that into another post down the road. But there is a portion of the process that I would like to touch on a bit more. One which is arguably the most vital. That, my friends, is making the actual offer on the apartment you want to purchase. This part requires a good amount of research, detail and some technique.

You spent the last month (I hope not longer) searching for a home. You’ve visited four to six different websites and 15 times a day and also subscribed to receive daily email alerts. After about two weeks you've now seen the same living room intro shots in every website that you now notice the small paint chip on the back living room wall. And that’s just from a photo less than three inches large! But there’s one listing that grabs your attention! You call (or email) the agent to find out if it’s available. The appointment is made and the minute you enter the apartment you try not to bounce around the walls in joy. No, instead, you act cool and pretend you aren’t that interested. Though, the minute you step into the elevator your blood starts to rush and call your significant other who couldn’t make the showing. Fast forward a couple of days, you both are now back in the apartment. The agent and you warmly shake hands. You introduce your partner and suddenly take it upon yourself to show the home. I mean, duh! You know it better than the agent because you’ve seen it ninety times! (89 of those times were online, of course). After about 10 minutes you begin to drill the agent with questions. You hear all the answers you want which leads up to one question. The one question you have to ask but which may break your heart. It all leads to that dreaded 4 word question. Are there any offers?

Does this scenario sound familiar to you? If not, don’t worry. It will be eventually, especially in the Long Island City real estate market. So whether you get a yes “there are a few offers on the table” or a no “at the moment there are no offers but there is a ton of interest” you want to make the best possible offer. Let me rephrase that. You want to make the strongest offer EVER! I mean, why wouldn’t you? If there are offers on the table you need to win. And if there are no offers you should make the best offer so that the owners don’t consider any others.

If you are a cash buyer, first, why haven’t you adopted me yet? (Yea I know old running joke). Bottom line, cash is king. It’s real, it’s fast and there is no bank involved to slow the process. Though, cash offers aren’t always the best. There are different ways you can beat a cash offer. Ultimately, the decision all falls down to the seller. The following information will help out both cash and financing buyer’s battle it out. May the final and best offer win!

What are the owner’s reasons for selling?

One very helpful piece of information, to help create a strong offer, is knowing the owners reason for selling the apartment. Getting this information can be easily provided by the listing agent who should give you an idea on how quickly the owners want to close. If the sellers are in a rush and you can close immediately then that will bode well in your offer. If the owners need some time to find another place to live and you are flexible on closing that will also help you out.

If you are financing please be pre-approved.

Before you make an offer please have your pre-approval letter ready. Having this step completed will show the owner that you are serious and that a bank has taken a peek at your financials and is willing to provide you with a loan. Making an offer that contains financing, with no pre-approval letter is a total waste of time. Plus, no agent will ever accept an offer without a pre-approval letter.

Know the market.

With the multitude of real estate aggregating websites out there it’s much easier to learn when apartments in Long Island City have sold, how many days the apartment was on the market and most importantly at what price they sold for. Do your homework to help you understand the market. A real estate agent, Andres Soto will help provide more in depth information such as sales in comparable buildings and may be able to learn what prices some apartments are currently in contract for.

How big is your down payment?

In this case, size does matter. Having a higher down payment will help when you’re competing with other offers. I strongly recommended that when you create an offer that you put down at the least 20%. Though, at least in the Long Island City market, you’ll be competing with buyers and investors who can put down more than 20%. Be prepared for that situation.

Counter offers are a good thing!

You made an offer but the seller did not accept it. How rude right?! Instead, they countered back. Don’t be turned off and please take this as a positive sign. Getting the owner to counter your offers means that they are interested in making a deal and that you may be close to their price target. A typical negotiation may have 2-3 counters before each party settles on the final price. When an apartment has multiple offers, the agent may suggest going into a “final and best” scenario. In this case, there typically are no counters just the winner and backups.

Write a compelling offer letter

It may sound old school but writing a compelling offer letter might be the extra credit work that differentiates you from other similar offers. I always recommend my clients to write a small letter about what they love about the home, neighborhood and how they can picture themselves living in the home. On the flip side, I’ve had buyers send me introduction offer letters which did make a positive impact on my seller’s decision. Remember, in the competitive Long Island City real estate market, you need to do everything possible to stand out from the crowd. Creating a compelling introduction letter could be the ticket that wins the sellers heart.

Meet the owners!

This may sound odd but a majority of real estate deals successfully close where both buyer and seller NEVER meet until the closing date. That’s the digital world at hand playing its part in the real estate industry. Depending on the owner’s scenario, I would suggest actually meeting them in person. No you aren’t going to ask to meet them directly but you could make an appointment that’s a bit inconvenient for the owners. An appointment where the owners will be home during the showing. If you land an appointment to view the apartment, (preferably this is a second or third showing) while the owners are home, make it a point to start up a small friendly conversation with them. Ask them feel good questions about what made them choose to purchase their home and what they will miss most about it. When it’s time to make the offer, and I hope you are making a good one, they’ll remember you a bit more and appreciate your strong offer because of this conversation.

There are a bunch of other things you can do to help “beef up” your offer. Contact me (Andres Soto/Twitter) and I’ll be happy to share some unique ideas I suggested my buyers to use. Yes, ultimately, the purchase price is the biggest factor in the winning offer. But as I mentioned before, no deal is ever the same. No seller is ever the same. So it’s good to have this additional arsenal when you want to purchase the home you want.

Extra Tip: Always make an offer where you know you gave it your all. You don’t want to go to sleep the day you lost knowing that you could have done, or offered, a bit more.