How To Handle Multiple Offers When Buying a Home?
As a home buyer, nothing could be more exciting than finding your dream home
and having your Realtor write an offer on your behalf. Offer gets submitted along with your pre-qualification letter or a letter showing proof of funds if you’re paying cash.
You are confident the offer will get accepted and you can begin a new chapter. Just as you are making plans, your Realtor contacts you to let you know there are multiple offers on your dream home. What do you do? Your budget will not allow you to go beyond a certain limit. Inventory of homes within your criteria is very low and you’ve been looking for weeks if not months.
As a buyer in a multiple offer situation, there are steps you can take that would give you a better chance of getting your offer accepted!
Have a pre-approval letter NOT a pre-qualification letter. Sellers want to make sure you are indeed approved to purchase their home. Remember, you’re competing with other buyers who may very well have a pre-approval letter in hand.
Don’t Go Crazy with the Contingencies- Cut the inspection period, remove the appraisal contingency(if you can). You’ve probably heard the term “cash is king”, one of the main reasons is because cash buyers often do not have contingencies and can close quickly. Always consult your lender/mortgage broker on these terms.
Make Your Escrow Deposit an Attractive One- It would be easier to walk away from a $500.00 than $5000.00, don’t you think? Sellers would like to see you are serious about going forth with the purchase and would think twice before walking away.
Seller’s Concession- While it makes great financial sense to have the seller pay for your closing costs and pre-paids, sellers are looking to sell their home at the highest price possible, paying for the buyer’s closing costs doesn’t align with their goal.
Offer Clean Terms on the Contract- Sometimes, terms of the contract can make a great difference to a seller. They might be looking for a quick closing or a ninety day closing, they may be really attached to their light fixtures and window coverings you put on the contract. It’s best for your Realtor to speak with the listing agent to find out seller’s motivation.
Have a heart-to-heart talk with your Realtor- We all LOVE to work with professionals who are pleasant to work with. Your Realtor who is representing you should put his/her best foot forward and be as professional and courteous as possible to the listing agent. Being difficult doesn’t benefit anyone.
As a buyer, it’s important to know how your local real estate market is performing, number of active listings within your price range, sold to list price ratio, terms, whether it’s a seller’s or a buyer’s market, if the home values are increasing before you even put an offer on a home. Once you find your home, have your Realtor do a market analysis which would show you what the fair market value of the home is. Educated buyers make sound decisions!
Lastly, regardless of what you think the house is worth, sold and active comps tell the real story. It’s important to keep in mind that in fast changing markets, active/pending listings are just as important as the sold ones.
How To Handle Multiple Offers When Buying a Home?
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