Hitting a Home Run: How to Win the Multiple Offer “Game”
Hitting a Home Run: How to Win the Multiple Offer “Game”
Hitting a Home Run: How to Win the Multiple Offer “Game”
With inventory levels shrinking, we are seeing more multiple offer situations than in the past few years. What the heck does that mean? It means that there is more than one (or in some cases, many) offers on a property and the seller can only pick one. Buying a house is both exciting and nerve-wracking, but finding a house you love and then realizing you are in a last round knock out game with other buyers definitely adds a new level of stress to the mix. Check out some of these tips to hit it out of the park and score that much-loved house:
STRONG & CLEAN WIN THE GAME
Many buyers will write a letter to include with their offer. That is fine—but some sellers will read them and some won’t. Your offer terms are more critical than crafting that perfect letter. If there was ever a time to bring your “A-game” on offer price and conditions, a multiple offer situation is it. Go in with a clean, strong offer—because you may not get a second chance. A few easy modifications to strengthen your offer are: No additional requests (i.e.: don’t ask for things that wouldn’t normally be included in the sale or items specifically excluded from the listing), offer a strong earnest money deposit, only use contingencies if they are an absolute must and suggest a short inspection period—all of these offer details will help to push your offer to the top of the pile.
PLAY BALL, DON’T LOWBALL
If it is in multiple offers, you are in a competition, so play it that way. A lowball offer will likely just end up in the trash bin. Price is usually the most important part of negotiations. However, there are many other factors in the transaction, including but not limited to: financing type, amount of earnest money deposit, length of option period for inspections, seller concessions or repair requests, requests for personal property to convey with the sale, closing date, other contingencies and title work preferences.
Cash is king, but most buyers are not cash buyers. The best way to compete against cash offers is having 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.
TIMING IS EVERYTHING
I would venture a guess that timing is crucial in 99.99% of real estate transactions in some form or fashion. The length of time of the option period, the closing date, contingencies—all are matters of timing, and in a multiple offer situation you want to be as attractive as possible.
Sooner is usually better—but what if it wasn’t? What if there was something you could offer to sweeten the pot that didn’t really cost you anything but time? For example: Mr. Scott is selling his home to move out of town to start a new job and needs a quick sale so he can relocate in time to start his new position and find a new house. However, his new house won’t be ready for 30 days. Time is a major factor for this seller and he may prefer to accept a lower priced offer with a 2 week closing with a 2-week leaseback before moving vs. a full price offer with a 45-60 day close date.
Understanding the seller’s situation (when possible) is a good start to writing an attractive offer. Each side has priorities that are important to them. What is their main concern—Is it price? Time? Is it an ugly chandelier they absolutely want to exclude from the sale? The most critical thing to them may not even matter to you! A multiple offer situation is very different than a normal negotiation—the reality is that the buyer must put his/her best offer up to bat in order to hit that home run.
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.
