The real estate market is heating up. Continued low interest rates and low inventory have combined to result in well priced properties being sold in a matter of days. When a well-priced property hits the market, it often results in multiple buyers wanting to purchase the home. This can lead to multiple offers being made on the same property. I personally have been in three multiple offer situations with clients in the last ten days (See 5/21 column).
It is a heart wrenching experience for
buyers that have finally found a home they want to purchase only to lose it to
another buyer. The wait for a reply can be excruciating in a multiple bid
situation. There are some strategies that can be employed to help buyers in
multiple bid situations.
First and foremost buyers must know
their limits. Buyers must set a top end price and do not exceed it. House
hunting and multi-bid situations are emotional and it is easy to get caught up.
Buyers need to avoid the win at all cost mindset. It can lead to over paying
and buyers’ remorse.
Buyers should have all their paperwork
in order. A broker can help with that. An offer should be submitted with the
property disclosures signed, the deed initialed, the MLS sheet initialed, any
addendum, for example, lead paint, signed or initialed, and all other pertinent
paperwork. Most importantly, buyers should include proof of their ability to
buy the home with the offer. A pre-approval letter from a qualified lender will
usually suffice. Having a clean offer that has everything the seller needs can
make an offer more appealing. It shows that a buyer is serious and ready to
move forward.
Buyers
should bid uneven numbers. A unique bid of $213,252 will stand out from a bid
of $213,000 or $212,999. This few extra dollars and couple of extra minutes of
scrutiny from the seller maybe all that is necessary to put a buyers offer in
the winning position.
Buyers
can add a personal letter to their offer. Buyers can explain why the house is
right for them, what they love about the house, and how they will care for it. Typical
sellers will have an emotional attachment to the home that they are selling. The
home is full of memories for them. All else being equal, knowing that the home
is going to someone that will love the home the way the seller did could make
for a winning bid.
Buyers
should also try to find out just how hot a property is. When did it go on the
market? How many times was it shown? How many offers are there? Any and all
information should be used to determine the offer price. The offer on a home
that has been on the market a day and has five offers has to be more aggressive
than the offer on a house that has been on the market for a week and has one
other offer. The more informed a buyer’s bid is, the more likely for it to
succeed.
As
a last resort, a buyer can throw all the above advice out the window and make
an outrageous offer. That always gets the seller’s attention. Offering $241,325
on a home that was listed for $230,000 will get a buyers offer noticed. If a
buyer must have that house, this is an effective strategy.
Buyers
who following these tips will find themselves on the winning side of these
multiple offer situations more often. Good luck and happy house hunting!
Rick is a Realtor, real estate author,
and long-time Windham resident. You can contact Rick with all your real estate
questions and needs at rickyost@kw.com
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