Offers - Competing With Other Home Buyers in Multiple Offer Situations
Imagine the day you finally find the home of your dreams. You fall in love. It's the perfect home for you, and you figure
you can get a great price because the seller is undoubtedly desperate for an
offer. This is your lucky day. So, you whip out the checkbook, write a good
faith deposit, and sign the purchase
offer. Your REALTOR then delivers the offer to the seller’s agent.
That night you're
dreaming about the home. You toss and turn, thinking about how you will arrange
your furniture, which color you might paint the bedroom. The next morning your
agent calls to say there are multiple offers on the house.
How did that happen?
You're astonished, then angry, and later, depressed. How did you get deceived?
You weren't. What
typically happens -- and I can't explain why -- is the minute you want to buy a
home, so do three other people. It's extremely common for the seller to suddenly receive two, three or more offers, all within
minutes of each other.
Tip: When you find a home to
buy, write your offer immediately. Ask your agent to call the seller's agent to
find out if there have been recent showings and
whether anybody else might be writing an offer.
Offers - Best Practices
home buyers wonder if it's even worth trying to compete against other buyers in
a seller's market. When there is very little
inventory on the market, it's not unusual for a seller to receive many offers.
It's almost always a good idea to write an offer anyway. Here are tips to make
your purchase offer outshine the rest:
Submit a Large Earnest Money Deposit.
Pending home sales sometimes blow up.
Many sellers are worried that once they commit to an offer, the winning buyers
might back out of the transaction or default on the contract after all the
other buyers have disappeared. The earnest money deposit is part of your down payment. By increasing it above normal
limits, you are showing the seller you are serious about closing. You're only
offering the seller more money a little sooner than later, but it speaks
Show the Sellers You Are Qualified.
Almost every multiple offer will be accompanied by a lender
letter. To stand out, ask your lender for aloan preapproval letter, which is
different than a prequalified letter. Being preapproved makes you a stronger
buyer in the seller's eyes.
Give the Sellers Time to Move.
Buyer possession is often a sticky point.
It's hard enough to juggle multiple closings if you are selling and buying simultaneously, and even
more difficult if the sellers are doing the same. Cut the sellers some slack by
giving them two to three days to move out after closing, without expecting
Shorten or Waive Some Contingencies.
By federal law, you have 10 days for inspections due to lead-based paint, unless you waive that right
in writing. Always get a home inspection, but tighten the time period.
If your loan is solid, waive the loan approval contingency. Talk to your agent
about comparable sales to decide if you want to waive an appraisal contingency.
Write Your Best Offer.
Don't hope for negotiation. Offer your highest price. Make it
attractive, maybe a bit above list price. Ask your agent for a comparative market analysis to determine
pricing. Sometimes sellers deliberately set a price below comparable sales in
an effort to generate multiple offers, so paying a little extra doesn't
necessarily mean you are paying over market value.
Sell Your Exiting Home First.
If you are moving up and have a home to sell, don't buy before selling. If you're a first-time home buyer, you might already have
the advantage over a buyer who needs to sell before buying. If one offer
contains a contingency of sale, the seller will gravitate
toward the offer without a contingency to sell.
Don't ask the seller to give you personal items. Don't expect
the seller to pay your closing costs. Find out which items are
customarily paid for by the seller and offer to pay a few such as realty transfer fees. Ask your agent to
befriend the seller's agent because sometimes sellers reject offers based on what the seller's
agent has to say about your agent.
Share the Love.
Most sellers have an emotional attachment to their home and want
to see it fall into the hands of an acceptable buyer. Be that acceptable buyer.
Write the seller a brief letter explaining why you love the home and why you
deserve to be chosen as the winning offer. Be "mushy" but sincere.
Prepare for a Counter Offer.
write the best offer, and a competent listing agent is likely to advise the
seller to counter all the multiple offers, even in a buyer's market. Also,
the seller retains the right to reject any and all offers in a multiple offer situation. SO GIVE IT YOUR BEST SHOT,
PUT YOUR BEST FOOT FORWARD, AND GET THAT HOUSE!! MAKE IT YOURS!!