It’s been a crazy real estate market for years with lots of buyers out there and limited inventory. So what do you do when you find yourself in a multiple offer situation? Besides having all your ducks in a row (a solid real estate agent on your side and a strong pre-approval letter from a reputable mortgage broker - these are both priceless and I could write a whole other post on each alone!), there are lots of ways to make your offer stand out against the competition. Of course sellers want top dollar - but with often so many offers to choose from, usually they are looking at the BIG picture - which is all the factors including contingencies, how well the offer is presented, a buyer’s flexibility, and more. So I always tell clients the best thing is to make the offer as strong as you can in every way that you can….
And here are the ways:
1. Bid aggressively.
This of course is the #1 way to win - bid highest and bid boldly. The really difficult thing about a competitive market is that as a buyer, you're ultimately bidding blindly. If you bid too low and lose out, you may regret not going higher; but if you bid high and win, you may always wonder if you could've gone lower! What you need to do is ask yourself this: do I WANT to own this home, how much can I afford, and how will I feel if I don't own this home? Sit down and break down the monthly costs - you'll be surprised to see that a few thousand in a mortgage often breaks down to only a few extra dollars per month. Secondly, know what the home is worth in this market and speculate what it may be worth in the future. And if you’re not sure the value to you and haven’t seen enough to know the market, it always helps to review recently sold homes in the area - although ultimately in this market comps don’t always match up. So again, ultimately it comes down to the value to you and what you can afford.
2. Be as strong as you can with contingencies
. There are some things beyond your control - like your down payment. But in this market there are buyers out there waiving contingencies, paying cash and not having home inspections. This makes it especially difficult for a first time home buyer - of course you don’t want to waive a home inspection! But consider having a higher dollar threshold on what amount of repairs you are willing to accept - this can help make you seem more attractive up against a buyer without a home inspection. So consider having an amount that protects you against the bigger ticket items (like a new roof or heating system), but high enough a seller knows your intention is not to withdraw your offer or re-negotiate unless there’s some large unknown issue that comes up. This is really their big fear!
3. Be flexible.
That means closing however quickly (or slowly) the sellers want. Flexibility goes a long way in this market. Maybe it's vacant and they're still paying a mortgage so the sooner the better, or maybe they are looking for their own home and hoping for some extra time… believe it or not, I have seen sellers choose an offer with less money because a buyer could close a week sooner than the next higher offer!
4. Write a personal letter
. We call this the "love letter”, and it’s pretty much become the rule in real estate. It doesn’t hurt to tell the seller a little bit about yourselves, how much you love their home, and what it will mean for you. It won't always win, but you'll be surprised how much it could help!
5. Make your first shot, your best shot.
Which means hitting all of the above. In this kind of market, you don't always get a second chance!
If you have any friends looking to buy in this market, please be sure to forward this email along to them and have them reach out.. I am always happy to help and as always SO appreciate your referrals and trust in me!
