Buying a home in a seller's market can be a challenge without the right negotiation tactics When you are trying to create a standout offer to buy a home, it’s important to consider the tools and tactics at a buyer’s disposal. According to industry experts, there is more to a home offer than just the price you are willing to pay. Other aspects of an offer, they say, create more opportunities for you to lock in a home – and could make all the difference. Here are some of the key tactics and pieces of advice, shared by industry professionals on the housing market’s front lines, that go into creating an initial offer to buy a home, along with the negotiations you should be poised for if you catch the seller’s attention. Get pre-approved to show you mean business. Consider obtaining a pre-approval for a mortgage from a lender by the time you reach the offer stage, as this document can play a key role in the negotiation process. First, the pre-approval letter tells the seller that you are serious about buying a home and that you have a commitment from a reputable lender on how much it will lend to you. Second, it allows you to tailor your offer to each individual house you put an offer on. Outline your parameters, and where you can be flexible. Key points to consider communicating in an offer include the expiration date of your offer, any contingencies that may void your offer, and, of course, the purchase price you are willing to pay for the home. Figure out if you can include an escalation clause. This is the essential ingredient in your offer that allows it to automatically match or beat other offers. An escalation clause tells the seller that you will buy the home for $X, but if they receive another offer that is higher than yours, you are willing to raise your offer by a preset dollar amount. In high-demand areas, escalation clauses should be considered. In an extremely competitive market? Consider an appraisal gap. Adding an appraisal gap to your offer tells the seller that even if the property appraises for less than the purchase price in the contract, you are committing a preset dollar amount to making up the shortfall. This is important because it is common to go over the asking price in a bidding war, and even though you say you will pay a certain amount, the bank will not lend you more than the appraised value of the home. This means you must have the cash on hand to make up the difference. Use the home inspection as a bargaining chip. After the appraisal, getting the home inspected is another major part of the home-buying process. While a home inspection is a valuable way to get to know your new potential home, it can also be used as a negotiation tool. One option is to reassure the seller early on that they will not be buried in inspection requests by saying you will only request the seller address repairs that deal with severe structural or mechanical defects. Buying a home is a process and, in a seller’s market, it can take multiple tries before buyers get their home. But from his experience, Sharp said even in the most competitive markets, there is typically a home out there for you. It is just a matter of making sure that you have done your work upfront.