How to win with multiple offers
Thursday Jan 26th, 2017
In a hot market, there are more buyers than homes for sale.
Some homes will sell before they are even registered in the local MLS. That means that sellers are often presented with multiple offers.
How can you position your offer to be theone the seller accepts?
The best way to gain an understanding of how multiple offers work is to know how they benefit the seller. Multiple offers mean that the seller has his/her pick of offers. Just because a seller is entertaining multiple offers doesn't mean you don't have a chance of getting the property, you just have to hit the right note with the seller that the other contracts don't.
If you want to compete in a multiple offer situation here are 4 things you need to do:
1. Offer the right price
This may seem pretty simple, but it isn't always so. A buyer may make the highest offer, but perhaps has not been qualified by a lender. A seller who accepts an offer from an unqualified buyer is taking a substantial risk. Should the offer fall through because the buyer fails to qualify, the home will lose valuable marketing exposure and possibly the other buyers.
In a hot market, many sellers won't even entertain offers presented by unqualified buyers.
If you want to compete with multiple offers, get pre-approved for a loan. Not only will you know exactly what you can spend, you will demonstrate your seriousness to the seller.
2. Offer the right terms
The best offer may not always be about the price. A seller will also look at such things as possession dates, inclusions, contingencies of the offer, etc.
If a seller wants a quick closing (or a longer closing) the closing date you put on your offer may not be suitable for them.
A seller may want to take certain things with them when they move, and any offer which puts that goal at risk may not be accepted.
It's possible that you offer a seller the highest price for his/her home, but you put in the contract a contingency that you must sell your home first. Of course, that may seem reasonable to you, but these are terms that the seller may not accept. Why would they wait for you to sell your home first when there's other options on the table?
3. Never assume anything
The Seller's agent is obligated to disclose when there are multiple offers registered on a property. Multiple offers are often used by sellers to improve upon the asking price or terms submitted in offers. The sellers agent may even be instructed by the seller to ask the buyers to "submit improved offers" depending on what terms they are looking for. Never assume your offer will be accepted just because you are asked to re-submit.
4. Work with an experienced agent
The best way to position yourself as the buyer whose offer is accepted is to work closely with an agent who can help you step by step from getting pre-qualified for a loan, to helping you find homes in your pre-approved price range, to helping you negotiate the home of your dreams.