You are probably reading this and thinking I am crazy. Properties that are priced below market value are generating Multiple offers. Yes, most of them are bank owned and or short sale properties. However, many buyers express frustration with being bid out by the higher bidder in todays market. Here are some simple tips for agents and Buyers to increase your chances of getting your offer accepted.
1. The escalating offer: Structure the offer at asking price with an addendum that simply states: The Buyer will pay minimum purchase price of X. The buyer will Pay $3,000 over any written legitimate offer. The maximum purchase price shall not exceed X.
The escalating offer works about 80% of the time but there are cons. The seller has the option to counter back at your maximum purchase price. Usually an experienced agent will be able to tell if the Seller is playing games in order to get all parties in a multiple offer situation to bid higher.
2. Telling your buyer to give it your best shot when coming up with an offer. Give the seller the amount that the buyers feel comfortable offering. Many buyers often complain about wishing they had given more when they had the financial ability to do so. Give your best shot the first time and dont play games because most of the time you will lose.
3. Hand deliver the offer if possible with a letter simply explaining who the buyers are. If at all possible, ask to present the offer in person to the sellers. Face to face always gives a better impression of the agent and it tells the seller a little more about the buyer.
4.Have the lender come in on the same presentation to the sellers and describe the buyers financing. Sounds different, however, Sellers are very leary of the ability to qualify for loans.
These tips have enabled me to educate my buyers and ultimately I had more deals accepted just using these simple strategies. I hope this will help you.
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Tim, it seems that going in with an offer to increase puts the buyer at a disadvantage. But, whatever works. Could you put a clause in the contract that the seller must show the other offer that drives the price up?
Do you have any experience doing this with REO's? I am curious how a bank would handle such an offer.