Buyers: How to Compete in Multiple Offer Situations

Do you fear looking for a home that you are going to get into a  bidding war? If so, this post may help you conquer that fear of competing with other buyers when you find the right home. Here are some tips to make your offer stand out from the rest:

Be the first one to get in the door. The buyers that wait to write an offer don’t look motivated.

The single biggest factor in determining who wins the property is who offers the highest price. If you work with me, we will discuss your feelings and motivation for buying the home, which can help guide you through how much you should offer. If you feel that this is the best home you’ve ever seen in your life, and you would be devastated that an offer came in higher than yours, you might want to consider offering as much as you feel is reasonable, even possibly going over the asking price.

If, however, you like it but you would not feel all that much is lost if the seller went with another offer, you might consider a lower offer.

Another big factor in multiple offer situations is having a good pre-approval letter to provide to the listing agent and seller. Note that there is a difference in pre-approval versus pre-qualification. In addition, the best offers come from buyers that are pre-approved with a mortgage broker versus a bank.

The seller will want to see a decent amount of earnest money offered. In our market, the typical amount of earnest money is 1% of the sales price rounded off to the nearest $500. If you are competing, you may consider offering more than this.

Find out what the seller is planning on doing when the home sells. Are they hoping to find another home? Are they moving into a home they already have picked out? Often, sellers will want to negotiate a period where they can stay in the home for a short while after the sale closes, so that they can find another home and have time to move into it. Having the sellers situation factored into your offer will help you substantially.

Some buyers like to add a personal note with their offers. This can be very helpful, because when sellers get offers from buyers they are very impersonal.  Introducing yourself can help sway the offer your way. When people introduce themselves, they might: tell the seller what they do for a living, talk about their family, say what they like about the home, etc. Sometimes they even attach a picture of the family. However, there can be drawbacks to these letters. If there is something that comes up on the inspection report that needs to be negotiated, the seller may remember the buyer raving about the property on their letter, and sometimes they won’t do any repairs or make any credits. It can occasionally weaken a buyer’s bargaining position. Your best bet is to keep your letter more neutral, unless you really are in love with the place and will accept problems as-is.

I have other tricks up my sleeve, and if you work with me I am happy to help guide you through the process!

 

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