Multiple Offers - How to Write a Competitive Offer

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Multiple OffersMultiple offers aren't fun for buyers.

Some buyers will actually shy away from making an offer on a property when they hear there will be multiple offers.  Their reasoning, "We don't want to get into a bidding war."

Then you have the buyers who think, if someone else thinks it's a good property, it must be a good property and I want to make an offer.

For your buyers who want to compete, you need to tell them what they need to do to win.

Call the Listing Agent

The listing agent should become your new best friend.  When speaking with the listing agent be professional and well prepared.

I know this sounds like common sense, but I've experienced too many instances where agents call and aren't professional.  My first thought is, "Why would I want to work with this person?"  Be prepared to ask the listing agent a series of questions.

For example, ask the listing agent:

  • When they will be reviewing offers with the seller?
  • When are offers due?
  • When will the seller be making their decision?
  • Do they currently have any offers in hand?
  • How many offers have been registered?
  • Would you prefer me to drop off my buyers' offer or email it?
  • Can we conduct a pre-inspection?
  • Do you need a Financial Information Sheet along with the pre-approval letter?
  • Do you want an Escalation Clause or a best and final?
  • When would the seller like to settle?
  • Does the seller need a rent back?

Asking questions shows the listing agent that your buyer is interested in making a good, clean offer that is attractive to the seller.  Whatever you do, don't just email your buyer's offer to the listing agent without letting them know it's coming.  That's not making a good first impression.


While the sales price is important, and I'll address that a little later, it's just as important to know the type of financing the buyer is receiving.    For conventional, FHA and VA financing you'll need to include a pre-approval letter along with the offer.  Don't even think about submitting an offer without it.

The pre-approval letter should state that the lender has reviewed the buyers':

  • Tax returns for the past two years
  • Most recent pay stubs
  • Verified employment
  • Confirms the buyer does not need to sell property prior to purchasing a new property

What makes for a really strong letter is if the lender can verify that the buyer has already gone through Underwriting.  This tells the seller that the lender has already received the necessary documentation from the buyer and has submitted it to their Underwriting department.  The benefit to the seller this that the lender can close quickly because they only need to put the property through Underwriting.  The seller has greater comfort in knowing that the buyer is qualified to purchase their property.

Your buyer should work with a well known lender.  If the lender is out-of-state or a small mortgage company, the seller or the listing agent may not feel comfortable with them and decline the offer.  They may be the best lender in the world, but if they're an unknown, it could become the difference between winning and losing.

Home Inspection

Contingencies should be kept at a minimum when in a competitive situation.

But I think every buyer should conduct a home inspection so they are well informed as to what they are buying.  When facing a multiple offer situation, ask the listing agent if you can conduct a pre-inspection.

The pre-inspection allows the buyer to make an offer based on the condition of the property.  Pre-inspections are great for sellers because they remove a point of future negotiation.  If the buyer's offer is selected, the seller doesn't have to be concerned with making repairs based on the home inspection because the buyer already knows what they are buying.

Yes, the home inspection is an investment on the part of the buyer, but it makes their offer more attractive to the seller.

Appraisal and Financing

Unless they have an abundance of cash, most buyers will need a financing and appraisal contingency.  When deciding the time frame for these contingencies, don't pull them out of the clear blue sky.  Ask the lender how much time they need to conduct the appraisal and provide the final loan commitment.

Inform the lender that you are facing a multiple offer situation, so the time frames should be as tight as possible, but they should also be realistic.

Sales Price

The listing price is the seller's offering price.  Review the comps for the past six months with your buyer to see if the list price is in line with the comps.  If the list price is in line, your buyer has to decide where they want to start the negotiation.

Here's a tip, don't start below the list price.  If the list price is aggressive and above the comps, by all means, consider offering below the list price.

Escalation Clauses

If the listing agent is looking at Escalation Clauses, be sure you carefully explain how they work to your buyer.  When deciding the "Cap" or the maximum amount the buyer is willing to pay for the house, review the comps again and ask your buyer what the house is worth to them.

If they have "lost" several houses or this house is in the school district they want or if they simply love, love, love the house, they may be willing to go above what the comps show.  That's their decision to make and be comfortable with.

They then must decide the increments in which they want to increase their offer.  This is the "Escalating Factor."  When making this determination, it's important to consider the price of the house.  The increment must make a difference to the seller.

If the list price is $600,000, an increment of $1000 isn't going to be a deciding factor for the seller.  If you want to get the seller's attention, an increment of $5000 might do the trick.

Cash Buyers

If you are fortunate to have an all cash buyer, help them understand that they will still need to be competitive.  The old school of thinking is that "Cash is King," however with buyers going through Underwriting and having the ability to settle in two weeks, cash is no longer the deciding factor.

Your cash buyers will need to show the listing agent and the seller that they have the cash.  They should provide documentation showing they have the funds to complete the transaction.  That documentation should be 30-60 days old, and certainly no more than 90 days old.

Have a Conversation With Your Buyer

Know that your buyer will be extremely anxious when submitting their offer.  Find out from the listing agent when the seller will be making their decision.  Make sure your buyers are available during the time the listing agent is presenting offers, just in case there are questions or changes that need to be initialed.

Talk about what parts of the offer the seller may counter.  Explain what happens if the listing agent asks for their "Best and Final."

Don't wait until you are in the middle of the negotiations to discuss these important items.  Discuss them when it's not urgent.  Let them think about what the property is worth to them.  You want them to feel good whether they win or lose.

How can your buyer feel "good" if they lose?

By putting their best foot forward and knowing they made the best possible offer.

Enjoy less stress by having smoother transactions by implementing these simple strategies today!

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Candy Miles-Crocker

Real-Life Real Estate Training

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