Multiple Offers: How Can You Win?

The housing market is red hot and that means an increase in multiple offers. When sellers receive more bids on their homes, they are able to be more selective in deciding which offer to accept.  This may be welcome news for sellers, but on the flip side the market is once again extremely competitive for buyers.  These five tips are meant to give buyers an advantage over their competition - to not only stand out among other bidders but to walk away with the keys to their new place.

1.)    Be Prepared to Make an Offer

This step needs to happen before house hunting even begins.  Determine the type of property and price range you have in mind prior to looking at real estate.  Do not go blindly into your search because you will emerge, frustrated, overwhelmed and empty-handed.  For example, if you are unsure what exactly you are looking for, ask your real estate agent for “comps” to compare properties within a similar price range in a certain area.  Comps will show the selling price, features, square footage, and house age for recently sold properties and allow you to compare relevant listings.  Educate yourself on the current housing climate before attending open houses and consult your realtor for market trends.  Remember, pricing is king so be sure to discuss sales strategies with your agent so you can come out strong.  When the market is tight, buyers particularly find themselves in a “final and best” situation. Make sure you are comfortable with your initial offer, determine what the house is worth to you and decide at what price you need to walk away. 

2.)    Talk About the Time Frame

Ask the listing broker what the seller’s target timeframe is.  If that timing fits into your own schedule – perfect.  Often times, the seller’s preferred timing may not be ideal so you will need to talk to the seller and come up with a mutually beneficial solution. 

3.)    Shorten Purchase and Sales Dates

The building inspection is the next topic of negotiation.  Be flexible, reasonable and willing to work with the seller to make the transaction smooth and painless.  Remember when the market is strong, there is always another bidder waiting to take your spot in line, so be mindful with your list of credits or repairs.  If both parties are satisfied with the deal then there is no need to delay, get the house inspected as soon as possible. Once the building inspection is scheduled, give a deposit and set move-in and move-out dates.

4.)    Lack of Contingency

The goal of the seller is to sell their house as quickly as possible for the highest price. The goal of the buyer is to purchase a home at an agreeable price and take up residency in timely fashion.  To achieve these goals there needs to be few-to-no contingencies, especially in a multiple bid situation.  If a buyer informs a seller that they are unable to purchase until their current home sells, that seller is going to move onto the next bid.  The same logic applies if a long closing date is requested in today’s hot market.  Not having a mortgage contingency is a plus for buyers.  Contingencies may be necessary sometimes, but when inventory is low like it is today - less is more.   

5.)    Letter to the Seller – Why You Love Their House

This is not for every home that strikes your fancy; this is for the house that gives you butterflies.  Compose a thoughtful and respectful letter to the seller explaining why you love their home and the particular features that solidify your goal of living there.  Explain why the house is perfect for you and why the seller should consider your offer over others.  Stand out among other bidders by quickly writing a letter that is open, honest and flattering!

            Buying a home during today’s hot real estate market requires a timely and targeted commitment.  Be prepared to take a leap of faith and make an offer right away or risk losing your dream property.  To optimize your results, put yourself in the seller’s shoes by asking what seems like a fair price for the house and what an acceptable offer is, do your homework on the market and know your own personal and financial limitations.  If you follow these simple but surefire tips – you’ll be in your dream home in no time!