Few failed endeavors can match the frustration of losing out in a multiple-offer competition. But, almost as disappointing is making the only offer–and a strong one–and having the seller outright reject it. Here are a few tips on how to sweeten your offer without jeopardizing your financial security.

A strategy that has been effective for some successful home buyers is to offer to pick up the cost of a fee that is normally paid for by the seller. For example, in some areas sellers pay for title insurance. This can amount to a few thousand dollars on an expensive property. If you pay for this instead of the seller, it increases the seller’s net proceeds.

Some communities, such as Oakland, Piedmont and Berkeley in California, have hefty transfer taxes. The Berkeley tax is 1.5 percent of the purchase price, which is customarily shared 50-50 by the buyer and seller. Recently, a Berkeley home buyer who was bidding in competition offered to pay for the entire tax. This increased the seller’s net by $9,000. The seller chose this offer over the others.

Whether in competition or not, it’s always a good idea to find out as much as possible about the seller’s situation before you make an offer. Many sellers, particularly those who haven’t lined up a new home, would like the opportunity to rent their home back from the buyer for a while after closing. If you’re renting, or haven’t sold your current home yet, you can gain favor with the seller by offering a rent back to accommodate the seller’s needs.

Under normal circumstances, a seller who rents his home back after closing pays rent to the buyer in an amount that covers the buyer’s carrying costs-principal, interest, taxes and insurance (PITI), prorated on a per diem basis. But some buyers in a multiple offer situation offer free rent for a time to make their offer even more enticing to the seller. This effectively puts more money in the seller’s pocket.

It’s never a good idea to waive contingencies if the condition covered by the contingency hasn’t been satisfied. For example, it would be risky to buy a home without having it thoroughly inspected by professionals. But, when there are several buyers competing, you may find that your competitors are making offers that don’t include an inspection contingency. Although it’s also risky for a seller to accept an offer that does not include an inspection contingency, most sellers find a contingency-free offer hard to resist.

HOUSE HUNTING TIP: If you’re inclined to waive contingencies, make sure you do your due diligence research first. Ask the seller for permission to complete inspections before you make an offer. Or, it the seller has obtained a presale home inspection from a reputable home inspector, make sure you read it carefully and fully understand it before you do make an offer.

Call the home inspector to discuss any questions you might have. Better yet, schedule an appointment with the inspector to walk through the property with you to explain the report and answer your questions. But, be sure to ask for the seller’s permission first.

Home inspections often include recommendations for further inspections. There may not be time to collect all the information you’d like to have before making an offer. In this case, it’s best to imagine the worst-case scenario. If the home inspection indicates that the roof is worn, assume you’ll need to replace it. Call a roofer for a ballpark estimate.

THE CLOSING: You’ll be ahead of the game if you later find out the roof only needs a few repairs.

Dian Hymer is author of “House Hunting, The Take-Along Workbook for Home Buyers,” and “Starting Out, The Complete Home Buyer’s Guide,” Chronicle Books.


Send tips or a letter to the editor to newsroom@inman.com or call (510) 658-9252, ext. 124.

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