It has been a few years since we have seen situations where multiple offers are in play but certain markets are inundated with them. Multiple offers are great but can be extremely stressful for both the buyer and the seller. Buyers today are faced with challenges that they never considered when first deciding to buy a home. As scary as the home buying process is in and of itself, a multiple offer situation can be scarier.
In a multiple offer situation, you are now competing for the same property with different buyers. Maryland state law does not allow the listing agent to provide the details of those offers to your Agent. If the seller has given his Realtor permission, then the listing Agent can share how many offers he/she has and when they will be presenting to the seller. There are some situations when the listing agent will ask for your highest and best offer. This is when you want to make your offer as best as you can possibly do.
Everyone wants a deal but remember that sellers can choose a competitors offer over something miniscule or something that you would be willing to readily accept. You may not be given the opportunity to change because the next persons offer already has it the way they want it. You need to make sure that you have everything in the offer that you absolutely need.
Here are a couple of suggestions for things that you could use to make your offer stand out:
1. Include an Escalation Clause – Escalation clauses can be tricky so be sure that you understand how it works completely before you use it. An escalation clause allows you to increase your sales price by any number you choose to beat out the next guy. It is a great tool if it works but a seller wants to get the most for their home they possibly can, so escalating by a low number might not be enough to set you apart from one of the other contracts. If you have to use an escalation clause, make it count!
2. Home warranties and the seller – A home warranty is an absolute wonderful thing to have when purchasing any home. Most of the time, buyers are asking the seller to pay for them. While there is nothing wrong with that, that $400 warranty could be the tipping point for the seller to accept a different offer. Be creative when it comes to the warranty. You can purchase the warranty at settlement yourself or you could ask a friend or family member to give it to you as a house warming gift.
Obviously there are a dozen other things that you can do to make your offer the best when in a multiple offer situation. If you find yourself in these circumstances, spend some time talking to your RealtorÒ about your options. He/she can guide you in the right direction and when you are living in your new home, you will be glad you took the time to do this!
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