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How To Win in a Multiple Offer Situation when you are limited on price
Well, it seems that we're back in the type of market where multiple offers are becoming common.
There's a mixed bag of buyers out there - conventional buyers, FHA buyers, VA buyers, and all-cash buyers and investors.
In a multiple offer situation, the offer price is probably one of the biggest factors when the seller is deciding which offers to entertain or accept.
But what do you do when you've reached your affordable max and can't really come up any more in price?
Here's just a few things that I recommend to my buyers. It requires a little investigative work, but it may pay off for you.
1. Find out where the seller is moving to, and what logistics are involved with that - Is is the case where and when they're moving may cause them need a short rent-back from you? In other words, after the close of escrow, it may help if they stayed in the home anywhere up to 30 days in which they can pay you based on your P.I.T.I. (Principle, Interest, Taxes, Insurance) calculated on a daily rate, or if you're in a financial position to do so, offer them a free rent-back period. A good example is when the seller's new home is not quite ready to move into and they need just a small amount of time. Offering the seller a rent-back is HUGE when it comes to these situations. No seller really wants to have to go into temporary housing and have to move twice!
2. Do the sellers have any pets that for whatever reason will be difficult for them to take to their new home? Once again, if you're in a position to do so, offer to adopt the pet. Or perhaps there is someone you know that may want to adopt the pet. This is a major relief when a problem arises for those sellers that are moving to an environment where the little guys may not have as friendly and safe of an environment. And since the pet is already accustomed to that home, there shouldn't be too much of a transition for the pet other than getting used to their new owners. Something like this can truly set you apart from the other buyers tremendously.
3. Write a fast inspection period into the contract - The standard contingency in California is 17 days to perform an inspection and remove that contingency to the contract. But honestly, you can get a certified inspection booked in a matter of days and get that all taken care of with your inspector in most cases. Try changing that inspection period to 10 days. Why? It shows the seller you're willing to get your due diligence done quickly and efficiently. That can score quite a few points with both the seller and listing agent.
4. Offer to inherit personal property that would be difficult to move - Is there any personal property that is large or difficult to move that would create a huge cost factor for the seller? Offer to keep the personal property or purchase the personal property depending on what type it is. Maybe there are some old paint cans or bricks/boards, etc. on the property. This can save the seller a lot of money not having to pay to move items that could create a substantial moving expense.
5. Write a personal letter to the seller that you've found you have a connection with - Do you and the seller both have children? Pets? Belong to the same organizations / clubs / charity? Share the same spiritual beliefs? Taste in architecture? Perhaps you share similar life experiences? Writing a personal letter to the seller that is sincere and makes some kind of connection or that creates some kind of bond with them can be HUGE in their decision to choose a buyer in a multiple offer situation.
6. Assure the seller you will continue to use their existing contractors - It could be that the gardener, pool service person, pet sitter, pest control, etc. are contractors that the seller has known for many years and feels badly that they will be moving and perhaps they will no longer have the work associated with the home due to a new buyer living there. Offer to keep those service providers employed when you take possession to the property. In most cases it may make sense for you as well, but the gesture could mean a whole lot to seller that is conscientious about relationships. It could also be the case where you may be able to assume any outstanding contracts that would otherwise cost the seller a lot to cancel.
Have I divulged ALL of my buyer strategy secrets? Of course not! Those are reserved for the buyers who I'm fortunate enough to work with.
The best advice I can give a buyer is: BE A STRAIGHT SHOOTER AND WEAR YOUR HEART ON YOUR SLEEVE. Don't be crafty or coy. It never works and you'll always create an environment of mistrust and animosity, and that's a recipe for disaster.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.