You finally found it – your perfecthome! It has EVERYTHING you’ve been looking for, in the exactlocation, for YOUR price…only….you aren’t the only one whofound it. Remain calm, breatheand relax. Multiple offers are more of a commonplace in today’smarket; especially in ‘hot markets.’ Some Realtors may even pricehomes below value in hopes of receiving multiple offers…but don’tstress here are a couple of tips for dealing with a multiple bidsituation.
As aseller, multiple offers, assuming they are not all ‘low ballers’should bring a smile to your face! You now have several options, youcan counter all the bids, counter the best offer or ask all biddersfor a ‘highest and best’ offer after indicating there are severaloffers. The to downfall to countering offers is at any point in time,if working with more than one party, is a potential buyer could justas easily walk away or even worse all buyers. As always, have your Realtor explain what the offer means, what thecontingencies are and which offer works best with your needs. YourRealtor should be able to advise you on the best countering methodsdepending on the offers presented.
As abuyer, it is paramount that you have a great Realtor who hasexperience in multiple offer situations on your side. Firstly, takenote that you are not competing with other buyers, you are dealingwith the seller and the seller only, it is their decision which offerthey take and while some states allow for a Realtor to disclose whatthe other offers are, unless the offer is considered confidential,others do not. It may seem disappointing your offer isn’t the onlyone, but this doesn’t mean it’s not the best (especially afterfollowing some of the tips below!)
- Ifyou can, put more money down in your earnest money deposit. Theearnest deposit is usually between 1-3% of the purchase price.Putting down the full 3% will show that you mean business.
- Ifyou can or if advised by your Realtor, stipulate to lesscontingency, such an example would be shorter inspection time (oralternatively, and less advisable, no inspection.) If opting forshorter inspection time, place a call to an inspector first andarrange an appointment then submit your offer. An inspection iswhen a qualified third party comes and recognizes areas of concernwhich could be minor, fundamental or safety risks within the home.
- Don’t‘low ball’ – in a multiple bid situation the seller has more thanone option. They are not going to pick the lowest offer if they canget more out of another buyer. Remember, this is a powerstruggle…the seller wants to get the most money they can for theirhouse while the buyer wants to pay as little as possible for thehouse.
- Createdesirable payment– We all know cash is king but if you need to getfinancing (as almost 80% of buyers do..) don’t fret! Here’s where my page about mortgages comes in handy! Now, as I explained previously,obtaining a pre-approval letter will really come in handy! The briefdifference between a pre-approval letter and a pre-qualificationletter is that the pre-qualification can be done over the phone,without much verification or required paperwork. Contrasting to apre-approval which the buyer provides documents, such asverification of employment, pay stubs, tax returns and bankstatements. Submitting your pre-approval with your offer will alsoshow you are a more serious buyer. Additionally, the type offinancing a buyer qualifies for can help sway a seller. For example,FHA (Federal Housing Authority) and VA (Veteran Affairs) guidelinesare a little more strict then a conventional loan. Therefore, if youare approved for FHA andconventional it can be very helpful in a multiple offer situation.This gives the buyer the option to select which type of financingthey could obtain should the buyer select their offer.
- Puta large down – putting a larger amount of cash down towards a homecan create an advantage in a multiple buyer situation. A larger downshows the buyer is serious, has the ability to save money and willhelp move things along quicker (usually!) with the lender.
- Writea letter to the seller detailing how much you love the house, thearea or what drawls you to the home, what your intentions are orwhat distinguishes you from other buyers. For example, in some instances where a home has been in the family for a long time, someone that might be ‘flipping’ the house may get less favoritism then someone wanting to raise their family in the home.
Dulynoted, there will be one party that does not get their offer chosen,so try not to be too attached to the outcome, there will always beanother home. However, having a great seasoned Realtor on your sidewill certainly enhance the chance!
I canhelp you find your dream home today! Call or email me today!