Winning Strategies for Multiple Offer Scenarios
When buying real estate, don’t assume your offer will be the best…make it the best.
1.) Offer an increased amount of earnest money and don’t be afraid to really put your money where your mouth is. If your offer has $20,000 in earnest money and other offers only have $5,000, the seller just might give your offer more attention. Your earnest money is going toward your down payment anyway.
2.) Send in proof of funds with cash offers or a strong pre-approval letter when financing is required. If financing is required go ahead and get fully approved subject only to inspection and appraisal. Ask your lender if he/she will speak with the listing agent.
3.) Allow the seller to maintain possession of the property for a few days after closing or rent back at a reduced rate if your budget will allow it (if allowed in your state). This will definitely be noticed by the seller.
4.) Write your best offer first. In other words, make an offer that is good enough that you won’t beat yourself up if you lose out on the property.
5.) Make sure you really understand home values in the area. Sometimes sellers price a home below market price in an effort to attract multiple offers. In these cases, you can offer above list price and still be comfortable that you’re not overpaying. If the offer is subject to appraisal, then you’re protected.
6.) Don’t include any unnecessary contingencies. Include only what you really need to protect yourself.
7.) Don’t include contingencies for the sale or lease of other property unless absolutely necessary. Sometimes including a financing contingency protects you just as well even when you have another home to sell (depending on your state’s procedures and forms).
8.) Don’t include any unnecessary requests for home warranties, repairs and personal property. This doesn’t mean that you shouldn’t ask for what you need, but if you include too many additional requests and special stipulations, the seller might be overwhelmed and underestimate your level of interest.
9.) Don’t ask the seller to pay part of your closing costs unless absolutely necessary. If you don’t have adequate funds to pay your own costs, then check with your lender to see what the interest rate would be if they cover your closing costs.
10.) Try to find out what’s really important to the seller and give it to them. It might be something as simple as a quick closing that seals the deal. Make sure your agent has an exploratory conversation with the seller’s agent prior to writing the offer and see if a couple of seller hot points can be uncovered. Also, make sure your agent calls the listing agent to review the offer when submitted.
11.) Make sure the seller understands what you love about the home and why you are the perfect buyer for it. You should write a brief cover letter that can be presented along with your offer. Some buyers are having great success sending along a brief video as well.
12.) Be prepared for a counteroffer. A competent listing agent will likely advise a seller to counter all offers…even good ones.
13.) Make your offer “As Is” , inspection for information purposes only, or limit the amount of requests you’ll make should an inspection issue arise. You can still have the right to inspect the property and to terminate if necessary.
14.) Include an escalation clause. For example, you could offer to pay $X,XXX more than the next highest bona fide offer with a cap on the highest price you’ll go to - and think about the escalation increments carefully when including this clause.
15.) If your offer doesn’t win, sometimes being the backup buyer works out well too.
