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Real Estate Tips & Resources

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Why Your Denver House Offers Are Losing to Other Bidders
As a prospective homebuyer, enduring an endless cycle of finding your ideal home, making an offer and then getting outbid by another buyer can be mentally and emotionally draining. All just to cross your fingers and stomach the process over and over again. Lather, rinse, repeat. But don’t panic. If you’re wondering how to compete with your fellow Denver buyers, we’ve got the inside scoop on why sellers may be rejecting your offer (it may not be what you think!) and the key to crafting a winning offer on a house. Why do my house offers keep losing? There are a handful of reasons why your house offers continue to be rejected. The key to turning the tides in your favor? Having a better understanding of what a seller considers an attractive offer, and drafting up a bid that appeals to those needs. For instance, maybe they’re looking for an offer with fewer contingencies or a speedier transaction. Or, maybe feeling confident that the deal will close is at the top of their priority list. Whatever the case may be, there are strategies homebuyers can put into play that’ll improve their chances of making a winning offer on a house. How do I stop losing out on multiple offers? We know what you’re thinking: you’re losing out on houses because you’re getting outbid. We’re going to let you in on a little-known secret… In a multi-offer situation, the highest bid doesn’t necessarily guarantee a win. Prevailing in a sea of other buyers all boils down to appealing to the seller. As a Denver homebuyer, having a trusted real estate agent on your side will help you create a strategy that strikes a balance between your goals and the seller’s goals. Think of all the valuable intel you can tap into by working with an agent — from what’s happening in the local Denver market to property values in the neighborhood to crafting a stand-out offer. Plus, they’re expert negotiators. And, let’s be honest, who wouldn’t want to get the best deal possible? Taking your time to interview and choose the right real estate agent can make or break your house-hunting experience, especially in a hot market like Denver. What are my options in a bidding war? 1. Consider a higher earnest money deposit Often called a "good faith" deposit, earnest money shows a seller that you’re serious about purchasing the home. The more earnest money you’re willing to put down, the more enticing your offer will be. While the money isn’t typically handed off to the seller until after they’ve accepted your offer, you can communicate your intent to make a higher earnest money deposit when submitting your offer. On average, buyers put down about 1%–3% of the home’s purchase price as a good faith deposit, depending on market demand and the terms outlined in the purchase agreement. In a competitive situation, your real estate agent will be your go-to resource when determining what earnest money amount will make your offer competitive. 2. Consider waiving certain contingencies A real estate contingency, also referred to as a "walkaway clause", is a stipulation included in an offer that requires certain conditions to be met in order for the sale to close. For example, some buyers may choose to include a home sale contingency, which means their offer is contingent on selling their existing home first. For sellers, contingencies like the home sale contingency pose a serious risk. For one, it can delay the purchase process and prolong the closing timeline. It also introduces uncertainty to the equation, as the entire deal could fall through and the buyer can walk away from the deal with no significant risk. The same nerve-racking dilemma applies to the financing contingency, which states the home sale ultimately depends on the buyer’s ability to secure financing. If a traditional mortgage lender pulls the rug from under you and denies your loan application, the deal is null and void. In fact, even the risk of a loan officer being slow and ineffective can be a major deal breaker for a seller who wants to prioritize a fast and efficient closing. That doesn’t quite translate to the confidence and certainty sellers are looking for. Instead, it means sellers are forced to start the process from scratch — relisting their home, assuming unexpected expenses and searching for a new buyer all over again. Ouch.Sellers (and buyers for that matter) don’t want to sit idly by, anxiously biting their nails while they wait for contingencies to clear … especially if there are other options! 3. Consider making an all-cash offer Make a cash offer? You’re joking, right? The average homebuyer doesn’t have that kind of money lying around. But, the reality is, if you've lost several bids already, you've probably been up against cash buyers. The fact of today's market is this: all-cash offers are the way to win. But here's the thing: you don’t have to have half a million dollars or more stashed away to compete against an all- cash offer with your own cash offer. The secret to making all-cash offers in Denver is working with iLender Accept.inc. We help everyday people who qualify for a mortgage secure the upfront liquidity needed to bid with the power of cash in their back pocket. Let’s face it: when a seller is choosing between an all-cash offer and one made using a traditional mortgage lender (read: with a risky financing contingency), which do you think they’ll pick? The certainty of cash, which can close in about 2 weeks? Or, the slower, riskier option? Not only are cash offers 4X more likely to win over an offer with a traditional mortgage, but buying a house with cash puts more negotiating power in your hands. So, just how much negotiating power are we talking about? On average, Accept.inc buyers enjoy a discount of $11,545 off the highest offer in a bidding war. And that’s just the average. Some buyers secure dramatically larger discounts off the highest bidder. One Accept.inc buyer won a home by submitting a cash offer that was $98,000 less than the highest competing financed offer. Now, that’s the power of cash! Let that sink in for a moment… That means those who got Cash Approved™ submitted a winning offer on a house that was roughly twelve thousand dollars less than the highest bidder. What’s more, homebuyers facing little competition on a property (a.k.a 2 offers or less) pay approximately $15,979 below the home’s listing price. That's the hidden discount of a cash offer. All-cash offers give homebuyers the competitive edge needed to score the winning offer on a house, while also providing money-saving benefits. Whether it’s in the form of a lower down payment, a lower sale price, or more immediate equity, cash is the secret ingredient to breaking the cycle of rejected offers. And the icing on the cake? After you’ve officially closed on your new Denver home, you can pay back the loan over time – just as you would through a traditional mortgage lender. There is no added cost to turn your offer into cash with Accept.inc and there are no hidden fees. No itty-bitty fine print you need a magnifying glass to read. It’s simply a new (and long overdue) approach to mortgage lending – one that gives everyday people the certainty, speed and competitive advantage that comes with shopping the housing market with cash. Make the winning offer on a Denver home Forget the days where being a cash buyer meant you’re an A-lister, an investor who flips properties, or a corporate developer. Now anyone who qualifies for a mortgage can become a cash buyer when they have Accept.inc on their side. Continuously getting outbid and losing out on houses is stressful and disheartening. We want to ensure our Denver community continues to thrive and the everyday homebuyer has the opportunity to create lasting memories in their dream home. So, the moral of the story? Crafting a winning house offer isn’t about making the highest offer, it’s about making the best offer. Ready to say farewell to losing offers and increase your chances of making a winning offer by 4X? Get Cash Approved today!
Kelly K. | Feb 4, 2022
How to Choose a Denver Real Estate Agent
The housing market in Denver over the past few years has been characterized by low interest rates, low inventory, and ready buyers. A city desirable for its location and job market, Denver is attracting a growing number of young professionals and young families, many of whom are looking for a place to live and need help navigating the exceptionally competitive local real estate market. How can they make sure they find the right house and put in a winning bid, instead of fighting a losing battle for months? Enter the role of the real estate agent. Challenges Facing Buyers and Denver Real Estate Agents Even with popular house listing sites and countless other digital ways to monitor the housing market, a real estate agent is an invaluable resource. But choosing a real estate agent is no small task. Especially when the housing market is as hot as it has been -- and will likely continue to be -- in Denver. In January 2022, Denver buyers looking for single-family detached homes faced an average price of over $700,000, according to the Denver Metro Association of Realtors monthly report. And homes continually sell above list price while staying on the market for less than three weeks. Neighborhoods like Capitol Hill, Highlands, LoDo, and Baker, for example, are gaining popularity for being walking distance to family-friendly food and attractions and prospective homebuyers should expect to face stiff competition when making offers. For buyers to have a chance at winning properties in these kinds of hot Denver neighborhoods, they need a real estate agent who is going to be proactive when it comes to getting showings, negotiating, and closing quickly. How to Choose a Denver Real Estate Agent Buying a home is one of the most important decisions of your life. So choosing a real estate agent that is knowledgeable and experienced is critical. Not only that, but a buyer’s agent should present you with options and financial strategies that will put you ahead of the competition. Make a list, then start to interview It can be difficult to know how to choose a real estate agent that has all of these qualifications. There are many online tools and databases for researching buyers agents. And don't forget to ask your network of friends, family, and coworkers for personal recommendations! You can start by putting together a list of agents that may be a good fit. But a face-to-face or phone interview is one of the best ways to get a feel for how they communicate and learn if they are a good fit for your needs. Ask the right questions During your interview call with potential Denver real estate agents, make sure you’re prepared with a list of questions. Some of these questions should be standard for the industry. But you should also include scenarios and questions that are personal to your situation as a buyer. Here’s a checklist of some topics you can cover when talking with a buyer's agent in an interview. These questions are designed to help you gauge how they communicate and what they'll be like to work with. Questions to help you choose a real estate agent Ask about their knowledge of the Denver marketWhat are current market conditions and what kinds of offers are sellers looking for?Which neighborhoods best meet your needs and desired lifestyle?Which areas are they most familiar with and what other places should you be considering?Their understanding of your financial options and opportunitiesHow much house can you realistically afford?What are the different types of mortgages and financing options available to you, including cash offers, delayed financing, etc?What is their experience working with Accept.inc and making all-cash offers? Their experience managing and closing transactionsWhat's an example of a difficult purchase agreement they've had to facilitate?Have they worked with a Denver mortgage lender specializing in cash offers?Their portfolio of sales Ask specific questions about working with buyers similar to you and your financial situationAsk specific questions about recent home sales in neighborhoods where you’re looking to buy How many deals have they successfully brokered in Denver in the last year? Ultimately, the three things that matter the most when choosing the best Denver real estate agent in your specific home search are as follows: One: Do they listen to you and understand your needs? Two: Are they responsive? This means that they are quick to respond to you and to other parties involved in the process. Three: Do they have a track record of being able to close a lot of deals successfully? Your initial conversations with potential buyer's agents should be used to give you a good sense of how each agent stacks up in these three areas. And then don't forget to make sure you like this person. After all, you may be spending a lot of time with them over the coming weeks or longer. You want to make sure you will feel like you're getting the level of service, attention, and respect of your needs that will make you feel good about the process. Figuring out how to choose a realtor in Denver is no small commitment, but a good buyer-agent partnership will make the process not just easier, but more successful. Your agent is your primary advocate when dealing with the seller and is a key member of your home-buying team. So choosing the right real estate agent is essential for securing your Denver dream home. Finding the perfect real estate agent and lender combo One final note: In a competitive sellers' market like Denver, you may have the best real estate agent in the greater metro area, but if you're not able to write a competitive offer, you'll still face an uphill battle. Real estate agents need to be well-versed in the various financial strategies available to buyers to give them every possible advantage. Understanding how to leverage cash offers, for example, to win your dream home could be the difference between having your offer accepted or not. Denver real estate agents who work with Accept.inc know that buyers making Accept.inc-backed offers are four times more likely to win a home and be able to negotiate better terms than buyers with traditional mortgages. With a real estate agent who is on the ball and a responsive lender like Accept.inc – a combo that can assure sellers you'll go from contract to closing fast – your offer is sure to outshine your competition. Buying Your Denver Dream Home with Cash Before you begin looking at houses in earnest with your new real estate agent, you'll need to have your financing lined up. If you haven't done so already, be sure to check out our tips for choosing the best mortgage lender. Accept.inc works with ordinary Denver homebuyers to help them buy a house with the power of cash and then pay it off like a regular mortgage over time. Apply to become Cash ApprovedTM and be ready to make your next house offer an all-cash offer in just a few days! Learn more about Accept.inc and how we work with Denver homebuyers and their real estate agents throughout the buying process!
Olivia G | Jan 21, 2022
Homebuyer Resources
Should You Use an Escalation Clause in Your Denver House Offer?
Imagine it: you find your dream house in Denver. It’s absolutely perfect for your family...and about a dozen other families, too. Let the bidding war begin! Buyers looking to get an edge in the Denver real estate market often add an escalation clause to their offers, stating how much higher they will go in response to competing bids. Should you? Learn how an escalation clause in real estate works and if it’s right for your situation. What is an escalation clause in real estate? An escalation clause in a real estate contract spells out that you’re willing to raise the offer price in response to a higher, competing offer the seller might receive. The clause sets a specific amount above the competing offer that you would be willing to pay, up to a maximum limit. Here’s an example of how it works: you find the perfect home and submit an offer of $300,000. With your offer, you submit an escalation clause, setting the maximum limit of $325,000 for your final offer. The terms of the clause state you will escalate your bid $1,000 over the next highest offer (meaning someone who bids higher than your $300,000 offer), until the maximum escalation limit of $325,000 is reached. So if someone else bids $310,000, your escalation kicks in and transforms your offer into a $311,000 bid, and so on, until you hit $325,000, at which point your escalation stops. The idea is that by using an escalation clause, you might prevent another buyer from outbidding you in a situation where you'd be willing to pay a little more than your initial offer. The escalation clause lets you "escalate" automatically. But, don’t jump the gun on submitting one. According to realtor.com, escalation clauses “should only be used when the buyer is fairly confident that there will be multiple offers, or when the buyer expects to pay an increased price.” Is an escalation clause a good or bad idea? Whether an escalation clause is a good idea or bad idea depends on the market. In Denver, with the combination of low inventory and low interest rates, competition in the real estate market has been more intense than ever. Using an escalation clause might give you an edge; or, it might just be table stakes. On the other hand, an escalation clause would be a bad idea if you can’t cover the difference between your pre-qualified loan amount and the escalation price. Going back to your perfect home scenario: if you qualify for a loan of $300,000 — based on your financials and the assessment of the property’s value — and you choose to bid higher than that, you will be responsible for coming up with the escalation difference out-of-pocket. Also, some sellers choose not to accept offers with an escalation clause because they want you to submit your highest offer up front. How do you write an escalation clause? The best thing to do is talk to your real estate agent about whether escalating would help your offer; and if so, under what terms. According to realtor.com, an escalation clause should focus on the following: What is the original offer of purchase price?How much will that price escalate above any other competitive bid?What is the maximum amount that the purchase price can reach in case of multiple offers? It’s also a good idea to make sure your escalation clause includes language requiring documentation from the seller proving there was a higher offer. Without it, you might end up paying more for no reason. Have you considered making a cash offer? An escalation clause may or may not be the most effective tool for securing your new Denver home, depending on your goals and situation — however, making a cash offer might give you the big advantage you need. Cash sales are on the rise, according to the National Association of Realtors, whose August 2021 survey showed that cash sales accounted for 23% of existing-home sales. In a multi-offer situation, it's not necessarily the highest bid that wins. A real estate cash offer can be more attractive to the seller, giving you more leverage to make a competitive offer, winning at a lower price or getting more concessions. With Accept.inc, you can get Cash Approved™, and gain the power to make real cash offers at no additional cost. Accept.inc offers beat an average of nine offers in multi-offer situations, and data shows that Accept.inc. buyers save on average $13,000 in multi-offer situations, when compared to the highest offer. Learn how to gain the competitive advantage of an all-cash offer with Accept.inc. today!
Stella W | Dec 21, 2021
Homebuyer Resources
How to Win a Real Estate Bidding War
You found it! The listing for your dream home. After months of searching, finally, here it is. The house has the perfect number of bedrooms, the right number of bathrooms, an enormous walk-in closet and so much storage space you’ll have to buy more stuff to fill it all. The backyard is to die for, and it’s also near a dog park. Restaurants and shops are nearby and the neighborhood elementary school is the best in the county. Best of all, you can actually swing the asking price. Score! There’s just one problem. If the home is in Denver, you will almost definitely have competition. To get their hands on the home they want, Denver homebuyers have been going toe-to-toe in heated bidding wars for the past year. According to one real estate agent's research in the spring of 2021, the majority of houses were expected to sell above list price. Sometimes far above. A bidding war happens when a seller gets multiple offers on a house or condo, and potential buyers must compete by submitting new offers to the seller. Learn more about what causes bidding wars, and the strategies you can use to win one. How to Spot A Real Estate Bidding War Low inventory and low interest rates have sent homebuyers on the prowl all over Denver. Even though the Denver real estate market has cooled down a little in the past few months, "cool" is all relative. Most sellers can still expect more than one offer on their house or condo. Denver home prices are still at record highs. The median selling price for a home in the Denver metro area was $545,000 in June, according to the Denver Metro Association of Realtors. Those prices are up six figures from early 2020. That means if anything comes on the market that seems even remotely affordable, expect a bidding war. If the house needs only a few repairs and improvements—expect a bidding war. If it’s near restaurants, coffee shops, bars and nightlife—expect a bidding war. A desirable property with a great location, nearby amenities, good schools, parks and rec, will tempt more buyers to compete, even going beyond the seller’s asking price. A bidding war can raise the price tag anywhere from a few thousand to more than $100,000 over listing price. How Does A Bidding War Work? So what happens in a bidding war? Once the seller gets all of the bids, if there are multiple offers to choose from, the seller can choose one or allow prospective buyers to submit new bids. The seller might be looking for the highest possible bid, or other terms like an earlier closing date, waived contingencies, or a more convenient financing option, like an all-cash offer—or all of the above. Many first-time buyers are surprised to learn that the highest offer isn't necessarily the automatic winner. The best thing to do before getting carried away by a bidding war is to work with your real estate agent to develop a solid plan. How Can You Win A Bidding War? Here are three strategies to consider for winning a bidding war. Strategy 1. Make an All-Cash Offer Did you know that you don’t always have to have the highest bid to win? Sounds crazy, but making an all-cash bid might be more attractive to the seller than other more complicated options. Partnering with Accept.inc. gives you the power to make a cash offer on a house even if you don’t have hundreds of thousands of dollars in the bank. Once you're Cash Approved™, you’re ready to compete in a bidding war with the power of cash. The best part? When you buy a house with cash the Accept.inc way, you can still pay for the house over time, just like a regular mortgage. According to national statistics, a cash offer is four times more likely to win in a bidding war over an offer with a mortgage. And Accept.inc’s buyers save on average $13,000 in multi-offer situations, when compared to the highest offer. That means that even when the offer isn’t the highest, making a cash offer may give you a huge advantage and help you win a bidding war. Strategy 2: Include An Escalation Clause An escalation clause in a real estate contract states how much you would be willing to raise (or "escalate") your offer price in response to a higher, competing offer that the seller receives. The clause sets a specific amount above the competing offer you would be willing to pay, up to a maximum limit. Talk with your real estate agent about whether to use an escalation clause with your offer. Strategy 3: Adjust Your Offer Think of how to solve problems for the sellers and make their lives easier. Whether it’s offering the seller a quick closing or covering the cost of home improvements and repairs, anything you do to reduce risks, costs, and hassle for the seller could make your offer stand out as the most attractive option in a bidding war. Work with your real estate agent to choose the strategies that will fit your goals, financial resources, and the current state of the market. Your real estate agent can advise you about when to make your move, and when to play it cool. Get organized, be prepared, and stay informed! Start Bidding With the Power of Cash Ready to start with a big advantage when shopping for houses in Denver? Learn how to make a cash offer in Denver, with Accept.inc at your side.
Stella W | Dec 3, 2021