10 Ways to Win In a Multiple Offer Situation.
In some situations sellers will have several competing purchase offers to consider. When this happens there are several ways a Sellers can handle the multiple offers. Sellers can accept the “best” offer; they can inform all potential purchasers that other offers are “on the table”; they can “counter” one offer while putting the other offers to the side awaiting a decision on the counter-offer; or they can “counter” one offer and reject the others. Also, they can come back to all the buyers and say "please submit your highest and best offer with no escalation clause". Now the buyer has to decide whether to go all-in or risk not getting the home.
Best Foot Forward on Price: If you really want the home, offer to bridge the gap between appraisal and sales price. It's about finding the terms that would be pleasing to the seller, without feeling you've committed to doing something you can not, or don't want to do as a buyer. Buyers that win multiple offer situations are going all in. They are doing everything they can to be chosen at the moment they write their offer. There is no second chance when you've been asked for your highest and best offer, so putting the best you can offer down on paper is critical. Your best shouldn't need tweaking later on. However, when it comes to price, buyers really need to find that number that if they lose the house to a higher bid they can honestly say, "I would not have paid that much for that house."
Preapproval On Financing: In order to have an advantage over the other hopeful buyers, you need to be preapproved from the very start and not prequalified. Being prequalified means giving a financial picture with a lender and having them pull your credit to make sure it’s in line with today’s mortgage guidelines. Pre-approval, on the other hand, is a little more involved and has a more extensive underwriting process. To obtain a pre-approval, you must provide financial information such as pay stubs, bank statements, and w-2”s.
Have A Flexible Closing Date: If you offer to match the seller’s desired closing date, this could make your offer look more desirable as you may be saving them from incurring cost. Let the Seller know that you can and will close as promised.
Write a letter to the sellers: Find out what’s important to the seller. Seller’s who love their home see value in buyers who understand the property and who may recognize and share the same dreams the seller had and maybe did not complete. Send a letter, short video, or photos about why purchasing the home is important to you. Doing so can add weight to your offer.
Waive or shorten contingencies: There are circumstances where it may make sense to waive a certain contingencies in your offer, such as a home inspection. Or offer to waive any repairs that come back as cosmetic. Generally the fewer the contingencies the more attractive the offer, If you do opt to waive any of the contingencies, just be sure to understand the potential risk involved.
Increase your earnest money: When you increase your earnest money deposit, it will show the seller you are serious about closing and will not back out of the transaction.
Consult with an agent: Your real estate agent will help you understand the current market conditions, including pricing of homes, and can assist you in preparing an offer to present to the seller that will stand out.
Be available to view properties and react: Make sure your are flexible to view homes at odd times or earlier in the day than most people are able and this will give you an advantage in being the first to view the new listing. If you find a home that you know is the right one, then do not delay on making an offer. Acting quickly could get you the home you want before the competition sees it, and may help avoid a multiple offer situation from the beginning.
Don’t be afraid to ask: Although there is no obligation for the seller’s agent to disclose any offers received, don’t hesitate about asking. You could ask, “what has the seller turned down?” “How many offers has the seller received?”
Be prepared when you don’t win the bid: No one likes losing a house that they want. Understand that there will always be another property that will come available and sometimes it’s even better than the one you lost.
There’s a lot that can happen when more than one buyer is interested in a home. It’s yet another reason to work with an experienced, trusted realtor who goes above and beyond for clients.
Kimmy Ostrom, Realtor
Keller Williams Hometown Partners, LLC
(316) 665-6477