How to Create a Winning Offer to Purchase a Home in the Lee's Summit Real Estate Market

1. The Money

 Every Seller is interested in trading their home for something of value. In most cases, it's Money so we'll start with that. It used to be a good rule of thumb that you needed to be preapproved before shopping for a house. In this market, that is the minimum barrier. With houses selling in as short as days or less, we have to have our financial house in order, prior to even bothering looking. Will you be a cash buyer or a finance buyer? Let’s look at a couple of the pros and cons of both. 

Cash is King!  If you have the ability to buy a home in cash, it’s definitely the favorite for sellers. It removes a contingency barrier that threatens to derail a transaction. You may have the best credit in the world, but next to cash, there is still a lender appraisal contingency that often can’t be removed with a credit offer.  Sellers like the least path of resistance to the closing line. As an investor buyer, you could be confronted with an emotional seller that doesn’t want their home to become a rental. Many financed offer contracts have a requirement to disclose if it’s an owner occupied loan or an investment loan, with cash there often isn't that same need to disclose.  Removing this negative emotional piece and allowing sellers to focus on the black and white details of your offer is one less hurdle you have to make it over. Coming up with Cash. There are many different ways to leverage cash for the purchase of a home. Talk with your local banker or financial advisor whether utilizing cash is a good option for you. 

Credit purchases are still a viable option. Just be aware others are using cash, and one of those buyers could be your competition. Don't be discouraged, however, if that’s your only option. Choose a solid financial institution with a good reputation, and a loan officer that has proven to show quick and great communication skills. You may need to reach them on weekends or late evenings and you should know up front whether that person will be there when you need them most. More cash down, will demonstrate strength. The more you can afford to put down upfront will help give the seller confidence you can deliver at closing. Place a minimum of 1% down on a security deposit, 2% if you can afford it. 

Preapproval or Proof of funds, have your documentation in order and ready to go. Don’t worry about having it written for exactly the amount as in the past; have the amount shown larger than the price range you're shopping homes in, as most likely you will be writing offers over list price. You don't want a letter or proof of funds for less than the amount you are offering.

2. The Expertise

The Real Estate Agent. This isn't the market to use a friend or relative agent, just because they have a license. You want to make sure the agent you choose is actively participating in the micro market you are targeting. The agent should be well versed on current market conditions and knows where it’s going from here. For investment properties, it becomes even more critical that you are working with an agent with all of the above but is also actively participating in the rental market and can bring that skill set for your benefit. At a minimum, your agent should have questioned you for specifics about the property you’re after, setup a home search that is tied to the MLS database and alerts you once a match to your criteria is made. The specialized investment agent will be able to help you identify hidden costs and closely estimate cash flow and expenses for a range of properties. The investment agent is a resource for you to bounce questions and thoughts off that will sharpen your investment game and add to your investment confidence.  Finally, the agent should be able to respond quickly to showing requests and get you all the documentations promptly. With both single family homes and multifamily homes moving quickly, your team needs to react quickly in order to evaluate the opportunity and present you with the details so you can decided if it’s a property you want to pursue.

3. The Offer

The offer is the most critical aspect of your strategy to purchase investment property in the Kansas City suburban real estate market. Whether you are buying in Lee's Summit, Raymore, Blue Springs, Greenwood, or Overland Park, KS, having your offer prepared by an investment specialized real estate agent gives you an edge to win your next investment property bid. The quality of your offer is a culmination of the steps you have taken above. At this point, you have your financials ready to present in the strongest format and you've chosen great expertise in an agent, your team is ready to go. The agent will take a snapshot look at the seller and listings agents’ situation and make the necessary inquiry to learn as much about their situation as possible, so the offer can be tailored to be attractive to the seller. It’s not always about being the highest bid, although very helpful. Identifying what is important to the seller ahead of the offer is critical to constructing a sound offer that will be received well. The offer should be clean, filled out in its entirety. It sounds like a simple step, but often in the busy times, steps can be missed. Sometimes it’s tempting to add specific requirements or inclusions to a contract that make it more complex. Remember the Sellers want the least path of resistance to the closing line. It’s best to keep your offer as "clean" and straightforward as possible. Your agent should also have a conversation with the listing agent to communicate your offer verbally when appropriate, let them know where a buyer could be flexible, such as the closing date or earnest money deposit. This is also a great time for the agent to communicate anything else you may want the seller to know. For example it could be beneficial for a seller and their listing agent to know you have a very strong credit score, have bought multiple properties and doesn't scare easy, etc. Finally the agent should deliver the offer in a timely manner and in a format the listing agent prefers.

4. Steps Forward

The 2020 Real Estate Market in Lee's Summit and other surrounding suburbs has proven to be competitive.   See here what to expect in the 2021 KC Suburb Real Estate Market.  There isn't any one thing for every transaction that will guarantee your offer will win.  By positioning yourself with these tips and aligning yourself with a skilled team to navigate this intense real estate market, you place yourself in a winning position and dramatically increase the odds of obtaining the  investment property you are seeking in a Kansas City Suburb.  It can be easy to get discouraged, however with the right team, determination, and focus on your why for real estate investing, you will realize great success in today's real estate market.