How to Make a Competitive Home Offer in 2021

August 18, 2021
Couple and mortgage banker discussing mortgages. Sandy Spring  Bank Mortgages

You’ve finally found it — your dream home. You’ve created a budget and now you’re ready to make an offer. But in this red-hot housing market, how can you make a competitive offer that stands out? A sellers’ market can be exhausting and challenging for homebuyers. In fact, bidding wars are becoming increasingly common in today’s housing market. In January 2021, 56 percent of buyers faced bidding wars on their offers, according to a Redfin survey. While it can seem daunting to be a homebuyer in this ultra-competitive market, there are some steps you can take to make your offer more enticing.  

Get pre-approved 

Unless you’re paying with cash, getting pre-approved for a mortgage loan is an absolute must in today’s market. You should meet with a lender well before making an offer to determine how much house you can afford. You may also want to search for homes around 10-20 percent less than your pre-approval amount. That way, you’ll have more wiggle room if you need to enter a bid higher than the asking price. 

When searching for a lender, consider a community bank. With local expertise and knowledge of the housing market in your area, community banks, such as Sandy Spring Bank, are a great choice for mortgage loans. And since time is of the essence in this market, community banks can often work faster than larger financial institutions to get you pre-approved.

Even though you’re anxious to start looking at homes, having a pre-approval letter from a lender will make your offer more attractive and credible to sellers. A mortgage commitment provides you with the best opportunity to demonstrate your financial ability to purchase a property.  

Hire the right real estate agent 

While you might be looking to save money, don’t skimp on hiring a professional real estate agent. A reputable agent will act as your trusted advisor and advocate throughout the homebuying process. Real estate agents have experience, local knowledge and access to key resources like home listings and neighborhood sales data. While the decision on how much to offer on a home lies with you, an agent’s advice helps to ensure the deal you make is fair. A buyer’s agent can also negotiate with a seller’s agent to overcome possible objections and help you anticipate and navigate counteroffers and rejections. 

When searching for the right agent, word of mouth is often the best resource. Ask family and friends who they’ve used and if they would recommend them. There are also many online resources to help you find agents in your area. Doing a quick name search online can help you learn more about the agent, such as their open listings, sales history, social presence and client reviews. In addition, don’t settle for the very first agent you meet. Plan to meet with a least three agents to determine who is the best fit for you, your family and your homebuying goals. 

Be prepared to act fast

In a sellers’ market, it’s critical to go visit properties that match your criteria immediately. Buyers need to arrange to see houses as soon as possible and should be prepared to make an offer immediately. This is one reason working with a professional real estate agent is extremely beneficial—they can often get access to a home fast. Be sure to have all your documents and paperwork in order, so you can make a competitive offer quickly. Just one day can be the difference between winning or losing your dream home!

Make your offer stand out

Even if your offer is already strong, you may need to go above and beyond in the current market. First and foremost, don’t underbid. Be sure your first offer is your very best offer. In addition, if possible, submit a large amount of earnest money. Not only does this show a seller that you’re serious, but it also offers a seller money now rather than later, which can speak volumes when sifting through numerous bids. Another way to help your offer stand out is to pay your own closing costs and if your budget allows, offer to pay the seller’s closing costs as well. Anything you can do to save the sellers money will help your offer stand out from the others.   

While some people are waiving contingencies to make their offers more attractive, Sandy Spring Bank doesn’t recommend limiting or avoiding contingencies because of the possible dangers that can arise.  It’s important to remember that contingencies exist to protect you as the buyer and ensure the investment you’re making is worth it. 
Even if you take all the right steps to make your offer competitive, there’s still a chance you won’t get the house. It’s important to go into the homebuying process aware that you may need to make a few offers before one is accepted — so don't put all your eggs in one basket. If you do lose out on your dream home, take a deep breath and thank the sellers for their consideration. Take time to then sit down with your agent, discuss what didn’t go right and create a solid plan for the future. With the right strategy, patience and timing, you’ll be holding the keys to your dream home very soon! 

For more information on Sandy Spring Bank’s award-winning mortgage team and banking products and services, contact us here to have a mortgage banker follow up with you, or visit our site.

Read more mortgages blogs. »


Websites not belonging to this organization are provided for information only. No endorsement is implied.

This material is provided solely for educational purposes and is not intended to constitute tax, legal or accounting advice, or a recommendation for any particular transaction.