Located just 98 miles from Denver and 46 miles from Estes Park, Grand Lake is deep inside the Colorado Rockies and is a desirable area for those looking to buy both primary and vacation homes. Like many resort-style areas, the Grand Lake, CO real estate market is currently very competitive with high prices and multiple offers on homes for sale. If you are interested in buying in this beautiful part of the country, you’ll need to do your due diligence, work with an experienced Grand Lake, CO real estate agent, and be well-prepared, so you can write an offer that will get a seller’s attention. These tips will help you out.
Write your offer over the list price
In a competitive market where a home in Grand Lake can easily get multiple offers, it makes sense to come out of the gates strong and make an offer that is above the listing price. Talk with your agent about what price makes sense depending on the particular property you are interested in.
Supply a pre-approval letter rather than a prequalification letter
Many prospective buyers don’t know there is a difference between being prequalified for a loan and being pre-approved. Prequalification is a less rigorous process than pre-approval and usually only requires a basic review of your credit. Pre Approval involves proof of income and assets as well as an examination of your debt-to-income ratio, credit history, and credit score. When you bring a letter of pre-approval with you to a showing of a home in Grand Lake, you are more likely to prove to sellers you are a good-faith buyer and that your offer is a solid one.
Provide proof of funds for closing costs and an appraisal gap
In a competitive market, sellers want to know that the offer they accept has a very small chance of falling through. If you prove to the seller that you have the necessary cash to cover closing costs (typically 3-6% of the price of the home) and that you are willing and able to cover the gap if the appraisal amount comes in lower than the sale price.
Include an escalation clause
One of the easiest ways to ensure your offer is competitive is to include an escalation clause. This is a clause that is written into your offer that automatically ups your purchase price when higher offers come in from other buyers until it reaches a set maximum amount you are willing to pay. If you are planning on including one of these in your offer, work closely with your Grand Lake, CO real estate agent, as well as a real estate attorney to make sure you are protected.
Agree to pay all closing costs and transfer taxes/fees
In a slower market, buyers may be able to get the seller to pay for a portion of or all of the closing costs in order to move their property. This is usually not the case in a competitive market. To increase your chances of buying the home in Grand Lake you have your eye on, agree to pay all your closing costs as well as any transfer taxes or fees involved in the buying process. This will show sellers you are highly motivated, and it will also sweeten the deal, as it will take some expenses off their plates.
Take out contingencies
Contingencies provide ways for you to back out of a deal if certain conditions are not met. Common contingencies include those based on selling your current home, results of appraisals or home inspections, or when obtaining a mortgage for the property. The more of these contingencies you leave out, the stronger your offer will be. You can leave out all the contingencies or you can make alterations to them to make them more appealing to the seller. For example, instead of including a contingency that a home inspection needs to come back with no issues, you can either buy the home as-is with no home inspection or offer to buy the property as-is with the right to do a home inspection. Talk with your Grand Lake, CO real estate agent about which contingencies you should drop and what risks this opens you up to.
Increase your earnest money deposit
The more earnest money you offer in your offer, the more likely a seller will be to choose it because it shows you are a serious buyer with solid financials. The typical amount of earnest money to put down on a home in Grand Lake is 1-3% of the sale price of the home. Talk with your agent about how much you should increase that amount based on your financial resources.
Some buyers in a competitive market will even offer the full price of the home as an earnest money deposit, effectively making it a cash offer. You can also state that your earnest money, which is usually returned to you if the deal falls through, will be non-refundable except for failure on the part of the seller to perform.
Be flexible
The more flexible you can show the seller you will be during the closing process, the stronger your offer will be. You can allow the seller to set the closing date on your home in Grand Lake, allow the seller to occupy the home for a few days or weeks after closing without charging them rent, rush the appraisal, or close before the end of the month so the seller doesn’t have to pay another month of his or her mortgage.
In a strong seller’s market, you need to be prepared to do what it takes to close the deal when you find a home you love. If you’re ready to start looking, reach out to a trusted Grand Lake realtors like Brenda Freeman for expert guidance.
