Choosing an Offer Price

In some parts of the city, it’s been very competitive for buyers trying to get the home they want. Multiple offers and bidding wars are not uncommon in Lakeview and Uptown New Orleans right now.

Recently, we had a buyer who could not understand why their more than asking price offer was rejected in favor of another. That’s when we had to have the conversation about the fact that it’s about more than just choosing an offer price.

What are your financing terms?

All other things equal, a cash offer is going to beat out your financed offer every day and we’ve seen a lot more cash buyers lately. Sellers and agents are going to look more favorably on an offer that doesn’t require underwriting, loan approval, appraisal review or any of the other myriad hoops that a lender makes you jump through.

Is there an appraisal contingency?

If you are getting a mortgage, there will be an appraisal required by the lender. Cash buyers may choose to forego an appraisal, removing that little doubt from the seller’s mind about whether the house will appraise – especially if they are pushing the envelope on pricing.

Are you asking for closing cost assistance?

This is a big one. Providing closing cost assistance goes right to reducing the seller’s net profit. If you make an offer contingent on assistance, a lower offer without it may beat you out. That’s what happened with competing offers on one of my listings recently. Both buyers offered the exact same price, but one asked for closing costs and one did not. The offer without assistance won.

Do you need an extended time between offer and closing?

Unless the house is mortgage free, the longer you need between the offer and the closing, the more money it costs the seller in terms of mortgage payments, taxes, insurance and utilities. They may take a lower offer just because the closing date is faster.

When you are house shopping in one of the hot neighborhoods in New Orleans, take the time to seriously consider what you can do to write the cleanest offer the first time around so you don’t lose out on your dream home. If you’ve written the highest, cleanest offer you can and you still get beat out? Know you did your best and move on to the next place.

If you need someone to provide professional guidance with your home search, call Crescent City Living at (504) 327-5303. We are happy to help!