Multiple offers. They are the delight of a home seller and the bane of a home buyer.
Increased competition in the real estate market – meaning less inventory available than interested buyers – can mean that homes hit the market to the immediate response of more than one offer … sometimes even on the first day a property is for sale.
It can seem daunting to be a buyer under such circumstances, but right now, many areas around the country are seeing just this scenario. And in a seller’s market, every buyer needs to be prepared to make an offer that stands out from the crowd.
At first it would seem intuitive that the buyer offering the most money will lock in the sale. But selling a home isn’t always about money. Sometimes getting a little creative with an offer can mean the difference between you and the next bidder.
Here are a few tips to help you craft the most appealing offer that a seller will see:
1. Walk into the house prepared to buy. Have your loan preapproval letter in hand before you even hit the pavement to look at homes. If you can’t be sure of the financing or can’t secure a home loan in a reasonable amount of time, a seller with multiple offers isn’t going to consider yours. These days, it can take a while to get approved for a loan, so make sure to contact a lender and secure preapproval the moment you decide you’re serious about buying a new home.
2. Now is not the time to skimp. Avoid making a lowball offer. If multiple offers are on the table, anything that is too low to seem serious will be rejected immediately. If a home isn’t in your price range, cross it off your list … because it is in another buyer’s price range.
3. Show a little flexibility. As I mentioned, money might not be the only incentive you bring to the table. If you can bend a little on a closing or move-out date or indicate your willingness to waive a lot of picky fixes on a home inspection, your offer will stand out from the crowd.
4. Be creative with your cash. While you may not be able to offer a substantial amount above the asking price for the home (and who would want to, if the home isn’t worth more than asking?), you can show your commitment to the purchase by offering a large amount of earnest money up front. Or maybe you have the cash on hand for a sizeable down payment, which can also be attractive to a seller.
5. Prepare for counteroffers. To what degree might you be able to meet the terms of a seller’s counteroffer? Make sure you are fully aware of your means. Can you swing a slightly higher monthly payment, and if so, is the home worth a higher price? Are you able to demonstrate flexibility in terms of contingencies on the final contract? Think about what you are willing to concede in case the seller comes back to the table with ideas of his or her own.
Your real estate agent is your best resource when it comes to negotiating with a seller. Before you make any kind of an offer, consult your agent for some advice on the local market, the likelihood of multiple offers, and any other valuable information about the seller that might play in your favor when crafting an appealing offer. With a little ingenuity, you can win a bidding war!