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 firstname.lastname@example.org