We are currently in a market where there are a large number of buyers looking for houses, with a small number of inventory for sale. This is known as a seller’s market, and in this situation it is common to have multiple offers on a property. Multiple offers make it much harder for buyers to close a deal, as they are in competition with others who want the same thing as them. There are a few things that you can do to increase your chances, and I am going to teach you how to win in a multiple offer situation using these key strategies.
Give Your Best Offer First
Many buyers think that in order to get a home for the least amount of money they should start with a low offer and work their way up through back and forth negotiations. This strategy is rarely effective, and in a multiple offer situation it is completely useless. The seller will be looking at offers from multiple people, and in this situation you usually only have one shot. You want to stand out from the others and give the seller as close to what they want as possible. If 5 people submit an offer on a home and yours is $50,000 lower than the others, chances are you will have yours rejected.
While it is important to give your highest offer first in order to even stand a chance amongst your competition, you need to remember your budget and what you think the house is worth. It is easy to get caught up in the heat of competition, but your budget is your budget. You dont want to look back and realize that you spent more than you should have, or that the house is not worth what you paid. At the end of the day there will always be something else that comes up, so you shouldn’t get carried away and do something that you’ll regret.
Consider Giving A Firm Offer
A firm offer is an offer that does not contain any conditions benefitting the buyer. Common conditions that buyers include in their offers are home inspection and arranging financing. Having conditions in an agreement allow for the buyer to protect themselves and potentially back out of the deal if something goes wrong between the time it is accepted and the closing date when everything is finalized. This added risk for the seller makes the offer much less attractive.
Sellers want to be sure that the offer they accept will actually close, so they don’t want to deal with the added headache and risk that conditions bring. That is why the winning offer in a multiple offer situation will usually be unconditional and essentially ensure the seller that nothing will happen to risk the deal not completing.
In order to protect yourself as a buyer, you will need to do your own preliminary research so that you aren’t submitting a blind unconditional offer on a home that could have problems. This means looking over all of the necessry documents with your realtor and determining if there are any red flags that could cause you problems. Another effective strategy is to have someone accompany you to your showing who can look at the property and point out any potential problems that stand out. While this is not as useful as a full inspection, you will at least be confident that there are no major problems with the home when you put in your firm offer.
Build A Relationship With The Seller
There is an emotional element to selling the home that you have lived and made memories in. Submitting a hand written note along with your offer detailing how much you love the home and how well you and your family will treat it could be the difference that causes the seller to accept your offer, even if there are other offers with a slightly higher price.
It is also important for your realtor to communicate with the seller’s agent so that they remember you when they review the offer with their client. This may not have a huge effect but it’s better than the seller receiving a random offer from someone they have never heard of. Again, emotion is a factor in residential real estate so anything you can do to make the seller think more positively of you can’t hurt.
Submit A Deposit With The Offer
Another way to show the seller that you are serious is by providing them with the biggest deposit you are able to make at the time that you give your offer. Most offers state that the deposit will be made upon acceptance, so being the one offeror who gives the seller a cheque right then and there automatically makes your offer more attractive. This shows that you have the money ready and they can be sure that you will follow through with the agreement.
Every Little Thing Helps
While each of these things may only make a small difference, doing all of them together could give you the boost you need to rise above the competition in multiple offers. Anything and everything that you can do to improve your offer makes a difference here, and in the current market you need all the help you can get.
If you’re looking to buy a home and want to have the best chance of success, check out my Buyer’s Guide for some more tips and an outline of the step-by-step buying process. You can learn how to calculate if it’s a buyer’s or seller’s market here. For any questions you have, feel free to reach out to me at any time:
My personal cell: 289-675-4882
Email: brad@braddornellas.com