If you’re a buyer and find yourself in a multiple offer situation, here’s what you need to know to get the home you want.
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As the spring roars into May, it is very common for buyers to find themselves competing against multiple offers on a home. If you find yourself in this situation, how do you set yourself up for success?
The first thing you can do is be well prepared. Have a strong pre-approval letter. How that letter is written by the lender is very important—sometimes the way they write it can make you sound like a rock star, while other times they leave the seller with more questions than answers regarding how far along you are in the process and how qualified you truly are.
Once you know you’re well prepared to make a strong offer, focus on the contract terms that really matter. If you find a hot property that’s got everything you’re looking for, don’t quibble over something immaterial or ask for a home warranty when the house is in great shape and you know you can get away without it. If you’re going to ask the seller for closing costs, make sure you know how much you actually need to make the purchase. Spend your time analyzing the very best offer price and closing cost combination. Your agent should help you with this by completing a pricing analysis and working with your lender to make sure you’re not asking for more closing cost subsidy than is needed. These terms determine the seller’s net proceeds and will weigh more heavily that most other terms in a seller’s decision. That said, things like flexibility with closing date, choice of financing and down payment and other terms can be offered in a way that shows the seller you’re all in on making the sale easy and successful!
Don’t think of a multiple offer situation as a bidding war.
Finally, have good information so you can be confident in the offer you write. Get hooked up with an all star real estate professional. A comparative market analysis isn’t restricted to sellers getting ready to list a home. A good buyer’s agent will have knowledge of the market and be able to objectively show you the value range for the house you’re offering on. Once you’ve got good information like that, you’ll be able to make a confident decision regarding how much you offer. If you are confident in the value you can make a strong offer based on this data. If another buyer chooses to offer more than the value number you’re comfortable with you know you avoided paying too much due to the frenzy and excitement involved when a hot property gets a ton of interest.
