If country living is your thing, you may want to find a way to make sure you win the bid on your dream home. While the competition may not be as steep out in rural areas, you still have to ‘woo’ the seller into accepting your bid.
Keep reading for simple tips on how to make your bid as attractive as possible.
Know the Seller and What They Need
Buying a home means that you are buying a part of someone’s life. If the seller is particularly attached to their home, they may be looking for something specific in the offer. Don’t enter the transaction blindly. Instead, get to know the seller. Write him/her a letter or talk to him/her in person. If you are looking at homes that are for sale by owner, you’ll have an easier time getting in touch with the seller. If you are going through a realtor, you may need to resort to writing a letter. Make it as personal as possible and make it so that the seller wants to respond.
Once you know what the seller needs, see what you can do about fitting it into your offer. For example, if they need time to rent the home back because their home won’t be built in time, then offer that option. If they need to be able to take all of the appliances and window treatments with them, say that it’s acceptable.
Knowing the little things that will matter the most to the seller can be your way into the home. Sometimes it’s not just about the money; it’s about the big picture and getting the little details that the seller needs.
Watch Your Contingencies
Some contingencies are expected and almost normal for a purchase contract, but if you go overboard, you could turn the seller away.
Decide which contingencies you need the most so that you can make sure you include them in the contract. Maybe choose one or two contingencies rather than filling the contract with every contingency out there. The two most important contingencies are usually the appraisal contingency and the financing contingency.
These two contingencies give you a way out should you be unable to secure financing or if the home doesn’t appraise for at least the purchase price. While it’s typically acceptable to include them in your contract, make their expiration date as soon as possible. In other words, don’t ask for a 30-day financing contingency and appraisal contingency. That just puts the seller out for 30 days. If you back out after that time, the seller just lost an entire month of being able to market the home to other possible buyers.
Walk in With a Preapproval
We don’t recommend bidding on a home until you have a preapproval from a lender. In rural areas, USDA financing is common, but if you have the ability to secure conventional financing, you’ll put yourself in an even better position.
The seller and/or the realtor may only entertain bids from buyers that have a preapproval. Your preapproval should be free of as many conditions as possible. The best case scenario is to have a preapproval that is only contingent on the appraisal and a final verification of your income/credit. This means the lender pretty much approved you for the loan assuming that nothing changes with your credit/income and that the property is worth as much as you bid on it.
If you have to use USDA financing, don’t think that you won’t win the bid. Rural homeowners are used to dealing with USDA financing and there’s nothing wrong with it. Many people have the myth that USDA financing takes ‘forever.’ It really only takes a week or so longer than other financing options and if you are organized and communicate well with the lender, you can get it closed in the same amount of time as a conventional loan.
The key to winning the bid on a rural property isn’t always making the highest offer. Of course, money talks and it could get the seller’s attention, but it’s not the only detail they care about. There are many factors that must come together in order to provide the best offer on a home. Knowing what the seller needs and minimizing your contingencies will give you the best chance of winning that bid.