How to Prepare Yourself for Multiple Offers

November 13, 2012 – San Francisco Real Estate Professionals

After surviving the last five years of a roller coaster real estate market in the Bay Peninsula area, multiple offers may seem like a dream come true. But they could end up giving you nightmares.

In the San Francisco Bay Peninsula area, some homes have ended up with multiple offers on one property at one time. Multiple offers create a frenzy atmosphere which leads to very rash decisions made on both buyer and sellers side of the offer. Because there are rash decisions made, the rate a deal falls through is very high – 40 to 50%! Generally, if there is only one offer per property, the rate a deal falls through is much ower, like 10%.

Here are some guidelines you can follow to lower the high rate of a transactions falling apart:

• Don’t make it a race to acceptance. S-l-o-w down the process. It is tempted to accept the first offer to cross the finish line, but if you do suspect your home may attract multiple offers, let the marketing in place work for you and your home. Follow through with open houses and agent advertising before entertaining the thought of looking at offers. According to Inman.com, “This allows potential buyers to take some time to consider their alternatives rather than rushing into the negotiation without a thought-out strategy. Also, by allowing at least 24 hours between the time that you issue the counteroffers and when you review what the buyers have countered back, you decrease the probability that the property will DFT.”

• Consider all angles when approached with an offer with an escalation clause. Sometime buyers submit offers which say, “John Doe will pay $1,500 MORE than the highest offer, but not more than $415,000.” If you consider an offer with this contingency, prepare yourself to loose other offers on the table. The rates that a deal falls through are very high with offers like this included. You may want to counter back without the clause and see if you can’t work with the buyer.

• Look at the QUALTY of the offer rather than just the offer price. A lower CASH offer may be more likely to close than a full price offer using a down payment and a month loan contingency.

• Look at an offer or offers with an open mind and discuss all scenarios with your agent. Even though there are many buyers in the market, it still takes a professional to get the best deal for you and what is best for your situation. Let us help you through the negotiation process – it will be a lot less stressful.

Contact us today and let’s get started!!