I have been looking at a particular home for several months. I finally put in an offer and learned that two other buyers made offers at the same time! Now I’m in a multiple offer situation. What can I expect?
Before I answer that, I have a question. Why did you wait to make your offer? Too many buyers believe if a home doesn’t sell in the first week it will be there, waiting patiently, for them to make their offer. Wrong! Act quickly to secure the home you want.
Now, moving on. As a buyer in a multiple offer situation here are some tips to help you purchase the home. Rule number one is to know the market. Ask your agent to get you the selling prices of comparable homes for the last six months. This keeps you from overpaying. You don’t want to win a bidding war by losing all restraint. Listing agents may purposely underprice a home to stimulate multiple offers. Know what the true value range is for the home. Determine your upper limit and stick to it.
Once you know the comparable sales and what you are willing to pay, go for it! Make a strong offer. You won’t prevail in multiple offers by starting too low. Also if you aren’t making an all cash offer, get the seller’s attention by making a large down payment if you’re able. Make a ten percent deposit instead of the standard three percent. Ultimately it will be counted as part of your down payment, but it shows the seller you really want the house.
Find out what terms and conditions the sellers want and work with them. Do they want a thirty day rent-back? Fine. Do they want a quick closing or a long escrow? Done. Structure your offer to meet the sellers’ wishes.
Personalize your offer. Write a letter, with photos, to the sellers and tell them about you and your family. Describe your housing search and why you love his home and the neighborhood. Many sellers want to know who will be living in the home they’ve treasured. A letter to the seller has helped many buyers secure their new home.
Remember a multiple offer situation can backfire on the sellers. Some buyers feel offended by the seller’s behavior, resent the bidding war and drop out of negotiations. Others may catch auction fever and overbid, only to use the contingency period to back out of the sale. Suddenly the home that had three offers is back on the market.
Be willing to walk away, even in a really hot market. Once you’ve researched the values and know your upper price, stay disciplined. When one door closes another one will open. There is a home out there for you. Go and grab it!