The end of the first quarter is almost here, so today’s topic is a scenario that many buyers and sellers are facing in our current market: a multiple offer situation. I have some tips and advice for both sides of the transaction so no matter which side you’re on, you can get the best deal possible.
If you’re a buyer, here are five tips you can follow that will help you beat out other offers and close on your dream home:
1. Offer more money. It’s that simple—money talks. If you’re pre-approved for $250,000, I suggest looking at homes in the $200,000 to $245,000 range so you have the capacity to raise your offer. At the end of the day, nothing works better than gree.
2. Write a letter to the seller. Money talks, but it’s not always about the money. Buying and selling a home can be an emotional process, and sellers are often emotionally attached to their homes, so they want to make sure whoever buys it will be good to it. Writing them a letter that compliments them, gives a little bit of your background, and shares what you like about the property and what you plan to do with it can help you tremendously.
3. Keep your financing clean. By “clean,” I mean keep your offer simple. For example, if you don’t need closing costs, don’t ask for it. If you can offer cash, of course, there’s nothing better than that. With the way our market’s going, one house listed in a good neighborhood can get 15 offers in a single day.
4. Buy as-is property. This means buying the property in its current condition as you saw it. As-is properties are subject to inspection, so you have seven to 10 days to do that inspection. If you don’t like anything about the home, you can always go back to the negotiating table. As I always tell my clients, get your foot in the door. Be the person who gets their offer accepted on an as-is property so the seller takes that property off the market. That way, if the next seller wants to offer more money for it, that won’t matter unless you decide to walk away from the deal.
5. Have your agent call the seller’s agent. This will fill you in on more details about the home and its seller, including why they’re selling. On our team, we call the seller’s agent once when we submit an offer and once while the offer is under consideration just to see how we can help our client. More often than not, this helps us win the home for them.
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What about sellers? First of all, if you are a seller, congratulations. There are a lot of buyers in our market and not a lot of inventory, so you’re in a unique situation.
My first tip for you is to just make sure you’re being a smart seller. Just because everything else is selling doesn’t mean your home will if it isn’t priced right. That’s why the most important thing you can do to create a multiple offer situation for your home is to price it right. If your property is worth $250,000, I’d suggest putting it on the market at $245,000. Listing it for less than it’s worth will attract more offers and you’ll end up selling the home for more than what it’s worth. You also want to price your home in a way that prevents any appraisal issues.
If you price your property too high just because the market is so good, buyers may not even want to see it because they know the might have to compete against other buyers and pay even more money for it. This is why it’s also important to listen to your Realtor when it comes to pricing your home. Look at your reasons for selling your home and take advantage of the market, but don’t be over-advantageous and miss the boat.
Once you get multiple offers, cash offers are great for a quick sale, but not all offers are created equally. You might get a cash offer that’s $5,000 or $10,000 less than what you expected and then get another offer that has a financing contingency and might take 30 to 45 days to close. If you want a quicker closing, you’re better off taking the cash offer. Otherwise, as long as the financed buyer is completely pre-qualified, you might be better off picking their offer. Again, make a decision based on your needs.
Lastly, look at each offer carefully. Have your agent call the buyer’s agent. Better yet, have them call the mortgage company that pre-approved the buyer so you can verify things like their credit, their bank statement, and their proof of funds. There is nothing wrong with asking for proof of funds because all you’re doing is making sure you have a closing at the end of the day.
Whenever we represent a seller, we make sure all of these factors are checked and verified. We don’t just jump at the first buyer who comes along with a great offer. We understand that moving is a nightmare, so we want an offer that will close. If a deal falls apart for whatever reason, it’s not only disappointing, but it’s also emotionally tiring.
If you have any more questions about how to handle a multiple offer situation whether you’re a buyer or seller, don’t hesitate to reach out to me. I’d love to speak with you.