Since COVID-19 first entered our shores, society has changed in a number of ways. Working from home is now the norm. Coughing in public is as stigmatized as forgetting to wear pants. Masks now serve as fashion statements. And, in the real estate industry, non-cash offers are immediately thrown out the window. 

In the beginning of 2021, all-cash deals accounted for almost a third of all home purchases, the highest percentage since 2014. Now, top real estate agents only expect this trend to become more prevalent. According to HomeLight’s Top Agent Insights for New Year 2022, 58% of real estate agents expect the rise in cash offers to persist as we head into 2022. 

Think outside the box

Since the middle of 2020, real estate agents saw buyers doing whatever it takes to incentivize a seller into accepting their offer. If you’ve been on the search for a new home in the market for a long time, you’ll know why buyers are thinking outside of the box to get their offer accepted. Competition is fierce. 

Consider throwing in anything you have at your disposal. Buy the homeowners a gift card to a high-end restaurant in town, take them on a cruise on your boat, bake them your favorite brownie recipe, or write a very personalized letter.

The key is to appeal to the homeowner’s wants and needs. If you’re a photographer, offer free family photos. If you own a bakery, tell the owner you’ll cater their next event. Whatever you have at your disposal, use it!

Getting down to business

In real estate, there are some common tactics real estate agents use for incentivizing an owner. If you don’t have a cash offer, here’s what you should do.

Get pre-approved for your mortgage and offer a decent price on the home. Next, approximately 67% of real estate agents recommend offering appraisal gap coverage or an appraisal waiver in the offer. 

Go the extra mile by asking for no repairs and including an escalation clause in the offer, which would indicate that the buyer will raise the offer should a higher competing offer come into play. 

Consider a long-term, rent back agreement

A rent-back agreement normally allows a seller to stay in the home for a designated period of time after closing. If you’re not in a rush to move into your new home, this could be a great option for you.

Normally, these agreements only allow one or two months maximum for the seller to continue living at the property, however, in recent months realtors have seen agreements that allow the sellers to stay in the property for six months or even a year.

Leverage your earnest money deposit

What’s an earnest money deposit? Normally, this is a small amount of money that goes into escrow to show that a buyer is interested in the property. Consider it a down payment of sorts.

Buyers can protect themselves by adding contingencies to the contract in order to get their money back should anything concerning show up in the inspection report.

From 2020 to 2022, average earnest money deposits have increased by 3% to 6% in order to incentivize the seller to accept the offer.

This is a tactic that doesn’t come without risks, as buyers could lose a lot of money if they later decide the home isn’t for them, so always consult a top-notch real estate agent before making any rash decisions.