Anant Deoras, another great video today, really important one here. You've looked at properties, you've lined up your financing, talked with a lender, you're pre-approved. You're ready to pull the trigger. Awesome, right? 3 steps to submitting a great offer is step #8 in my 13 part video series buying a Chicago home.

 

So how do you put your best foot forward in submitting an offer? So before we discuss a couple of items there, I want to make it very clear here: In many neighborhoods of Chicago, we have a severe shortage of inventory, right? So if you remember back, if you took it, Econ 101, supply and demand, low supply, what happens to demand? What's happening is it's resulting in a upward pressure of pricing, and you're sAnant Deoras, another great video today, really important one here. You've looked at properties, you've lined up your financing, talked with a lender, you're pre-approved. You're ready to pull the trigger. Awesome, right? So how do you put your best foot forward in submitting an offer? So before we discuss a couple of items there, I want to make it very clear here: In many neighborhoods of Chicago, we have a severe shortage of inventory, right? So if you remember back, if you took it, Econ 101, supply and demand, low supply, what happens to demand? What's happening is it's resulting in a upward pressure of pricing, and you're seeing it in the marketplace. All the properties you've been viewing on my website, a lot of them are more expensive than they were last year. So what does this all mean? In a seller's market, buyers have to have everything, ducks lined in a row, okay? So let's get into it.

First thing, earnest money, want to make sure that earnest money is significant. Doesn't have to be a lot, and a quick 101: Earnest money is deducted from overall, it's inclusive of your down payment, so if you have a ten percent down payment, you're not paying additional earnest money. It's all-inclusive. So basically at closing, it's just the net. What I typically do with my buyer is I like to do up to five percent, possibly a little bit more, if their property is above 400,000, so a pretty strong earnest money, that's initial and final, is critical.

Two: Speed of the offer. These properties here, and you're going to be seeing as you search, they're flying off the market, so the quicker we can get all our ducks in a row, and for me to submit that offer, the higher probability the seller can look at it, and if it's a really strong offer, the buyer may accept it before possibly the open houses happen on the weekend. A lot of times they'll wait, because they want to have multiple offers. So speed in getting that offer, your earnest money, those are two things.

And three, in rare cases, I don't do it as much, really it kind of depends on what neighborhoods, in some of the popular neighborhoods it's a little bit more common, price escalator. What does that mean? In a price escalator, particularly when I'm feeling the market, and I advise that, "Well, we're probably going to have multiple offers," what I'll insert into offers along with the pre-approval is a price escalator, which says, "Mr. Seller, this is our offer. If there are multiple offer situations, we will increase the purchase price up to a certain amount, as long as we're giving a bonafide offer." So what does that all mean? Let's say we have a $200,000.00 property, and we submit a full list offer, 200,000, and there happens to be another property that's at 201, or 202. If we include that particular rider, the price escalation rider, we can say, "Okay, buyer will increase the offer to 205, but we need to see that bonafide offer, and then we will increase it basically up to 205." Since the bonafide offer was 201, we would increase it by X amount, and typically I do 1,000 or 2,000. So in that situation, the buyer would pay, if it's a thousand, would pay 1,000 over the competing offer, which is 201, so then 202 would be accepted; typically accepted by the buyer, but then it's not strictly on price. So just because we may beat them on price, there may be other factors that the seller ... Unfortunately it's everything, right now, how the market's going is skewed a little bit more to the sellers. This may have been a little bit confusing, but if you've got any questions, give me a call.