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.

 
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106 Comments on How To Win in a Multiple Offer Situation when you are limited on price

20 Most Recent Comments Displayed Show All

MAY
15
2012
698,000 Points 15 Featured Posts Outside Blog Called Shot Master

Ah, yes.  The good old days of multiple offers.  Actually, we have had multiple offer situations all the way through the bad times.  It's called good pricing which piques interest and competition.
6:06am • #89
Outside Blog

Some good insights.  The good old days have returned for now.
8:13am • #90
137,578 Points 1 Featured Post Outside Blog Attended Rain Camp

Great tips, because multiple offers are becoming the norm here also.  But most of the homes seling here are bank owned, so cash and quick close are still the two biggies.
8:21am • #91
879,152 Points 48 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

My favorite part of your blog (and it is jam packed with EXCELLENT ideas) is the part about  BE A STRAIGHT SHOOTER AND...  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. So true!
8:42am • #92
499,366 Points 13 Featured Posts Outside Blog Called Shot Master

Hi Ralph, excellent post.  Too many buyers and agents think it is only about price.
11:03am • #93
202,641 Points 11 Featured Posts Outside Blog Attended Rain Camp

That's some pretty sound and logical advise. Thanks for the info.
2:38pm • #94
Very good suggestions. Multiples offers situations are difficult but you did a good job at offering some good suggestions.
5:59pm • #95
3 Featured Posts

Those are some very good ideas to try to set your offer apart from sooo many others. Reblog!
6:54pm • #96
518,831 Points 7 Featured Posts Outside Blog Called Shot Master

Ralph,

These are some great tips!   Thanks for sharing!
11:34pm • #97
MAY
16
2012

Here in Toronto multiple offers are the norm and most often homes in good locations are sold for well over ask price. I encourage my clients to do a preinspection or often the Sellers will have a professional inspection report that is available, be prequalified for a mortgage so they can make a firm offer with no conditions. I also encourage them to have a bank draft or certified cheque for 5% of the selling price at the Offer presentation.  In the end though, the Seller generally accepts the highest bidder in spite of all our best efforts. I did have a situation where my Buyer was in competition with only one other Buyer. The offers were apparently very similar and we were sent back twice to improve our offer. My clients were pretty close to their maximum and only increased their offer minimally each time. I realized the other bid was from a builder who was planning on tearing down the house to build a new one. I really talked up the fact that my clients, a young couple who had grown up in the area loved the house and wanted to start their life in the same neighbourhood where their families still lived.  The Seller chose to "work" with our offer and we were able to make a deal. My clients were ecstatic.  
5:48am • #98
447,738 Points 72 Featured Posts Outside Blog Called Shot Master
All very good points. The personal letter thing needs to not be mushy, gushy as that turns people off.
7:09am • #99
423,511 Points 16 Featured Posts Called Shot Master

Great advice Ralph, I like to see people who know how to think Creative Solutions.  Good job!
7:53am • #100
MAY
17
2012
230,772 Points 1 Featured Post

In our world most times with multiple offers it is all about the bottom line. I think you can play 20 questions with listing agent to see if you can get any advantage that way. In the past have had sellers refuse to sell to a buyer because Buyer talked about what they were going to do to a home but was a while ago. Short sale or foreclosure...definitely bottom line.
3:28pm • #101
MAY
19
2012
786,756 Points 85 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Some really interesting comments and experiences I'm seeing here!

Only on the 'Rain!
7:25am • #102
MAY
20
2012
166,897 Points 1 Featured Post Attended Rain Camp

WOW!  You really thought this out.  I am very impressed and certainly going to re-blog.

Especially liked the Adopt a Pet and Offer to Inherit Property.  Joy
6:42am • #103
371,285 Points 10 Featured Posts Outside Blog Called Shot Master

Ralph: I loved all of these suggestions. I already utilzie some but not the rent back free of charge or willing to take on any pets/furniture, etc. I think is a great  article. Cheers!
6:48am • #104
JUN
03

Now THAT'S thinking! Great article, thanks~
1:18pm • #105
JUL
02

Ralph, Love your thinking out of the box strategies!  Offering to keep the pets is one I never thought of, but could be a real winner!  Thanks for sharing.
6:08pm • #106
JUL
30
881,854 Points 10 Featured Posts Attended Rain Camp Called Shot Master

Ralph, CA sets the trend and it moves to East - so we should start multiple offer scenario soon (already seen at some places - though the price was intentionally kept low for those listings.)

Curious, if you ever used 'Escalation Clause' - making an offer $500 higher than the highest and best offer with a cap - provided the agent shows the highest offer.
9:18pm • #107
SEP
28
1 Featured Post

These are all great suggestions and many are ones that I wouldn't have thought of. Thank you for sharing this!
6:38am • #108

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