There is a strong demand for homes across the country, leading to a competitive market where buyers often find themselves bidding against others for a limited number of properties in a given area.
In the midst of this intense competition, potential homebuyers can take strategic steps to make their offers stand out—without needing to forgo important conditions such as a thorough home inspection.
According to real estate professionals who specialize in assisting homebuyers, here are several expert-recommended strategies to improve the attractiveness of your offer:
Consider Applying for a Purchase-Rehab Loan
Bruce Marks, from the nonprofit Neighborhood Assistance Corporation of America (NACA), advises homebuyers to consider purchasing a neglected or fixer-upper property using a purchase-rehab loan, rather than relying on conventional mortgage options.
With a purchase-rehab loan, buyers can borrow more than the home’s sale price and use the extra funds to cover needed repairs—similar to home improvement loans or the FHA 203(k) program.
“Purchase-rehab loans were quite popular in the past,” Marks explained, “but nowadays, not many lenders offer them.” He noted that while these loans can be more complex—requiring verified work completion and coordination with contractors—they can be a smart way to reduce competition, as many buyers shy away from properties that need renovation.
“You might find a home that needs some work but can be customized to your liking,” Marks added. “Competition is usually lower, and these homes often attract investors.”
Increase Your Earnest Money Deposit
To stand out from other buyers, Lee Davenport, a real estate expert from Atlanta, recommends increasing your earnest money deposit—offering more than the seller expects.
Earnest money is a good-faith deposit provided by the buyer to show serious interest in purchasing the home. This amount is usually negotiated by the buyer’s and seller’s agents and typically ranges from 1% to 3% of the home’s purchase price.
For example, if 3% equals a $5,000 deposit, offering $6,500 instead could give your offer a competitive edge.
“This extra deposit signals to the seller that you’re committed,” Davenport said. “It can even help them cover their current mortgage or put money toward their next home.”
Davenport also noted that a larger earnest money deposit may discourage low-ball investors and cash buyers, who often submit minimal deposits of $500.
Explore Down Payment Assistance Programs
“Check if your city or town offers down payment assistance grants,” Marks suggested. “Some cities have simple online applications, while others may require a phone call to the local housing department.”
Although some grants offer relatively modest amounts—such as $10,000—they can still make a significant difference.
For example:
-
In Pleasanton, California, homebuyers may receive up to $100,000 in down payment assistance.
-
In Georgia, eligible buyers can qualify for $7,500.
-
In Iowa, grants of up to $2,500 may cover both down payments and closing costs.
-
In Milwaukee, depending on the zone, buyers may receive between $5,000 and $7,000.
“Securing a government grant can give first-time buyers a real advantage,” Marks emphasized. “It can boost your lender approval odds and help you make a stronger offer. You may even be able to outbid the competition.”
Unlock the secrets to realtor success by overcoming common challenges with proven solutions! Visit DLE Network for more information.
Explore more about How to find a home for sale before anyone else does