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

By
Real Estate Agent with Maui Life Homes / Metro Life Homes RS-78439 / BRE #01708344
https://activerain.com/droplet/B5n

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.

close

Re-Blogged 9 times:

Re-Blogged By Re-Blogged At
  1. The Ivanov Group 201-895-1768 05/14/2012 12:59 AM
  2. Michelle Francis 05/14/2012 01:09 AM
  3. Inna Ivchenko 05/14/2012 01:58 AM
  4. Doug Patterson 05/14/2012 04:51 AM
  5. David Lewis 05/15/2012 01:53 AM
  6. Kerry Jenkins 05/15/2012 11:57 AM
  7. Gene Riemenschneider 05/18/2012 03:47 AM
  8. Joy Carter & Jeff Booker Brother and Sister Team 05/19/2012 11:45 PM
  9. Winston Heverly 07/30/2012 02:06 PM
  10. Praful Thakkar 03/30/2018 09:19 PM
Topic:
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Rainer
116,418
Ric Mills
Keller Williams Southern Az - Tucson, AZ
Integrity, Honesty, and Vast Real Estate Knowledge

Some good insights.  The good old days have returned for now.

May 15, 2012 01:13 AM #88
Rainmaker
180,172
Karen Steed
Tallapoosa, Bremen, Waco, Buchanan, Temple, Carrollton - Tallapoosa, GA
Associate Broker Haralson Realty

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.

May 15, 2012 01:21 AM #89
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Joni Bailey
101 Main St. Realty - Huntsville, TX
Your Huntsville / Lake Livingston Area REALTOR®

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!

May 15, 2012 01:42 AM #90
Rainmaker
834,432
Bob Miller
Keller Williams Cornerstone Realty - Ocala, FL
The Ocala Dream Team

Hi Ralph, excellent post.  Too many buyers and agents think it is only about price.

May 15, 2012 04:03 AM #91
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John DL Arendsen
CREST BACKYARD HOMES, ON THE LEVEL GENERAL & FACTORY BUILT HOME CONTRACTOR, TAG REAL ESTATE SALES & INVESTMENTS - Leucadia, CA
Crest Backyard Homes "ADU" dealer & Contractor

That's some pretty sound and logical advise. Thanks for the info.

May 15, 2012 07:38 AM #92
Rainmaker
103,677
Cliff Johnson
Solid Source Realty - Stone Mountain, GA
Very good suggestions. Multiples offers situations are difficult but you did a good job at offering some good suggestions.
May 15, 2012 10:59 AM #93
Rainmaker
92,179
Kerry Jenkins
Prime Properties - Crestline, CA

Those are some very good ideas to try to set your offer apart from sooo many others. Reblog!

May 15, 2012 11:54 AM #94
Rainmaker
644,939
DeeDee Riley
Lyon Real Estate - El Dorado Hills CA - El Dorado Hills, CA
Realtor - El Dorado Hills & the Surrounding Areas

Ralph,

These are some great tips!   Thanks for sharing!

May 15, 2012 04:34 PM #95
Rainer
22,264
Donna Webber
ArcRealty Inc., Real Estate Brokerage, Toronto, ON, Canada - Thornhill, ON

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.  

May 15, 2012 10:48 PM #96
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Debbie Reynolds
Platinum Properties - Clarksville, TN
Your Dedicated Clarksville TN Real Estate Agent
All very good points. The personal letter thing needs to not be mushy, gushy as that turns people off.
May 16, 2012 12:09 AM #97
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Bob Crane
Woodland Management Service / Woodland Real Estate, Keller Williams Fox Cities - Stevens Point, WI
Forestland Experts! 715-204-9671

Great advice Ralph, I like to see people who know how to think Creative Solutions.  Good job!

May 16, 2012 12:53 AM #98
Rainmaker
641,997
Bill Reddington
Re/max Southern Realty - Destin, FL
Destin Florida Real Estate

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.

May 17, 2012 08:28 AM #99
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Ralph Gorgoglione
Maui Life Homes / Metro Life Homes - Kihei, HI
Hawaii and California Real Estate (800) 591-6121

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

Only on the 'Rain!

May 19, 2012 12:25 AM #100
Rainmaker
193,859
Joy Carter & Jeff Booker Brother and Sister Team
Keller Williams Parkland/Coral Springs Realty-GreatFloridaHomes Team - Coral Springs, FL
Trust Your Family's Move To Our Expertise!

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

May 19, 2012 11:42 PM #101
Rainmaker
535,205
Gay E. Rosen
Julia B. Fee Sotheby's International Realty - Larchmont, NY
As Real as Real Estate Gets!

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!

May 19, 2012 11:48 PM #102
Rainer
14,371
Shelly Palmer
Snyder Sutton Real Estate - Topanga, CA
"Love Where You Live"

Now THAT'S thinking! Great article, thanks~

Jun 03, 2012 06:18 AM #103
Rainer
27,493
Sylvie Zolezzi
Decker Bullock Sotheby's International Realty - Greenbrae, CA

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.

Jul 02, 2012 11:08 AM #104
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Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

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.

Jul 30, 2012 02:18 PM #105
Rainer
105,433
Rebecca Riopelle
BLINK Realty Group - Arlington, MA
Broker Associate & REALTOR®

These are all great suggestions and many are ones that I wouldn't have thought of. Thank you for sharing this!

Sep 27, 2012 11:38 PM #106
Rainmaker
2,933,219
Richard Weeks
Dallas, TX
REALTOR®, Broker

The Texas Real Estate Commission has advised Texas agents that esculation clauses are not to be used.

Oct 21, 2013 10:04 PM #107
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