The real estate market today is very aggressive and properties are receiving multiple offers, in most cases at least ten. When making an offer on a property, especially in today's market, you want to put your best foot forward. Come in with your A game, make your initial offer your highest and best! Make sure you have your finances in order, a letter with a pre-approval from a reputable lender, and a bank statement that shows you have proof of funds to close the deal. When I start working with a buyer, I want their letter in my file along with proof that they have the funds to close the deal. This is the key element one needs before even starting to look for a home to buy. A good clean offer with a price that is the highest you can comfortably pay, along with the knowledge that this is the highest that it will appraise for is a good bet in winning in the multiple offer situation. Many sellers are also impressed when your agent writes a letter to the seller about you, your intentions for the home...this makes you real to them, rather than just a piece of paper with numbers on it. Last week, my client's offer was not the highest of the multiple offers, but it was clean, well written and the cover letter is what made the seller choose my clients over all of the other offers.
Every buyer has a strategy or a process when making an offer. A common practice with buyers is to offer less than the asking price and assume that the seller will come back and counter half way in between the low offer and their high price, thinking that through a series of counters the buyer will end up paying what they can afford. Unfortunately, it doesn't always work that way and anything can happen between two negotiating parties. People are unpredictable when it pertains to real estate transactions. In my local market, that strategy is highly unlikely to be successful. With buyers out numbering sellers, it has turned into a seller's market.
In situations today, where there are multiple offers, it is very rare to see a seller accept a price that is far less than the initial asking price. In reality, sellers can expect to receive more than their asking price.
Real estate negotiations are definitely a game to be played, but if you play with a set of assumptions that turn out to be incorrect, you may end up the loosing party. Unfortunately this will result in you, the buyer, not really ever getting a chance to play. Listen to your REALTOR's advise, become educated on what the market is doing, don't listen to Uncle George who hasn't bought a house since 1960. We REALTORS who are out there every day are your best resource. If you have too many decision makers, this may cause confusion. Let your lender and your REALTOR help to educate and guide you to make the best decision for your personal situation.
My advice on how to handle a multiple offer situation is to again, put your best foot forward! Make an offer that you believe is right for the comparables in the market, and don't get emotional. Make sure this is something that you can commit to and see through to the end. Don't make an offer based on assumptions on how you think the other party will negotiate. Make sure your REALTOR pulls the comparables of similar homes in the area relevant to the subject property to help you decide on a number together. As your Realtor, I will help walk you through this entire process, step by step.
My goal is to make sure that you understand how the market is working, what similar homes have sold for, and to make sure you are in a position to win when you make an offer.
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