Competing to Win in Multiple Offers when Buying a House
Real estate inventory is lower right now and with fewer homes for sale, we are seeing more multiple offer situations. What is a multiple offer situation and what can you do? It is just like it sounds–when multiple buyers all make offers on the same property. Good news if you’re the seller, but if you’re the buyer, it can be tricky. After all, the seller can only pick one “winner!” Buying a house is both fun and stressful, but picking out the perfect house and then realizing you may not get it adds a new level to the process. Check out these tips to secure the house of your dreams:
MULTIPLE OFFERS = PRETTY MUCH THE WORST TIME TO “LOWBALL”
Multiple offers is nothing more than a competition—so bring your “A” game if you want a shot to play! You may only get one shot, so make it count. A lowball offer will likely get laughed at when compared with more realistic offers. Price is typically the most important part of negotiations. However, there are many other factors in an offer, such as the type of financing, earnest money amount, length of option period, closing costs, who pays for the survey, repair requests, closing date and title work.
Cash is king, but the reality is that most buyers are not cash buyers. Have your loan preapproval ready to submit with your offer. Don’t let the sellers wonder if you can “put your money where your mouth is”—show them you can.
Many buyers are encouraged to write a letter to include with their offer. That is fine and all—but some sellers will read it and others won’t. Even the most heartfelt letter won’t overcome an ugly offer. Go in with the cleanest, strongest offer you are comfortable with—because it may be your only chance. Other than price, a few options to strengthen your offer are: keep it simple (i.e.: don’t ask for things that wouldn’t normally be included in the sale or items specifically excluded from the sale), offer a larger earnest money deposit, shorten your inspection period and keep your contingencies to a minimum. Each item will be scrutinized against the others, so put your best offer forward!
PLAY TO THE SELLER’S WANTS
Considering the seller’s needs (if/when possible) may hold the key to winning over other offers. Each side has priorities that are important to them and if you can get insight into what matters to the seller, it could be a game changer. What is their top priority? Is it price? Timing? The ability to do a 2 week leaseback? You never know…the most important item to them may not even matter to you!
Competing in multiple offers is different than a “normal” negotiation—the reality is that the buyer loses a lot of their negotiating power before it even begins, simply because of the situation. It’s basic supply and demand, but because it’s a house it’s very personal too. If it’s the house of your dreams, you’ve got to knock ‘em dead with a beautiful offer.
Lisa E. Priest loves to win and is a Texas Real Estate Broker with Picket Fence Realty, Inc. You can reach her via phone or text at 903-948-3343 or read more at BuyPalestine.com.