The things that make up an attractive offer for a property vary based upon what kind of market we’re in. Knowing the market environment is crucial to crafting an effective offer. If you’ve both sold and bought properties as I have, you start to get an idea for what makes up an effective offer to purchase. But you have to also keep in mind that every seller is unique and has different motivations. Learning to recognize what kind of offer will appeal to a specific seller is an art – one that you will learn over time. That being said, here are some tips for crafting an effective offer.

• First off, recognize that the winning offer for a house is not necessarily the highest bid. Things like length of closing, amount of cash down and loan pre-approval are all factors in getting your offer accepted. Also, the fewer contingencies the better for the seller.
• Next, try to understand what type of seller you’re dealing with. Are they in the process of buying another house? Have they had a previous offer (or offers) fall through? Are they in a distressed situation? How flexible are they with financing? All of these things make a difference when you are trying to get an offer accepted, so find out as much as you can about them.
• Make concessions in your offer that show the seller you understand their situation. If they’re in a hurry to close, offer an expedited closing. If they have been burned by offers that fell through, offer “earnest money” of up to 10%. If you’ve done your research (which you surely have), then you have valued the home for your purposes. In this case, waive the appraisal – this can remove the anxiety felt by a seller over the valuation process.
• Finally, your offer should be presented in person if possible. This allows for any questions or objections to be addressed immediately and makes the offer “personal”. This can be an effective technique, but is not always possible.

I suggest you create a template and refine it based on your investment criteria and what you find works best for your style. Things that your offer letter template should include are:

• A complete and accurate legal description of the property.
• The amount of earnest money that will be deposited, along with a forfeiture amount.
• Financing details or means of all-cash offer.
• Proposed closing date.
• Offer price.
• Length of time the offer is valid for.
• Transaction details.

Remember to keep your offer simple, but make sure is it comprehensive. The fewer demands and requests for concessions from the seller, the more likely your offer is to be accepted. Also consider a personalized cover letter that tells the seller why you are interested in buying this particular property. Anything you can do to set your offer apart will give you an edge in this competitive environment.

For a one-on-one consultation on whether or not being a real estate investor is right for you, request an Investing Aptitude Assessment from StreetWise Property Investing.  Get it here: http://www.streetwisepropertyinvesting.com/30-minute-investment-aptitude-assessment/