Inventory is in tight demand. It is a seller's market right now. There are more buyers than sellers. You need to be prepared to make a quick decision and a strong offer very soon after viewing a property.
Not all homes sell in multiple offer scenarios after only a couple of days on the market, but in our market right now, many are. In most parts of town, where homes are below jumbo loan territory, average days on market are in the 30+ range; and, multiple offer situations are common.
Most of us love the "gem" houses that prepped for market, stage their furniture, advertise with professional photos, and show looking like a 10. Guess what..... so do other buyers looking in that area! Houses that are priced right and presented well move fast. It isn't uncommon to find yourself as one of many offers that the seller is considering.
So how do you win without simply over paying? Well here are a few of the tried and true methods to making a seller choose your offer instead of the possibly many other offers:
1) Don't start off with a low ball offer
We can pretty well tell in advance if there is a high probability that the awesome new listing that you love is going to be a hot property. Every house is unique. Analyze the price in advance. If it is priced high, offer accordingly. If it is priced advantageously, you need to come in strong.
Don't start off on the wrong foot. Contrary to popular belief, not all offers come in at 95% of list price and then negotiate to a mutually agreeable price. Most hot listings garner full price offers immediately.
2) Put down a strong earnest money deposit
This is one of the best ways to make your offer look more attractive without spending any extra money. In the price ranges under 400K, normal earnest money deposits are $1000. If you can increase earnest money funds to 1%, your offer will look far more serious. It looks like you have more skin in the game. Buyers that are well prepared and represented properly should not lose their earnest money.
4) Bump up those conditions a little bit
Do you really need a three week due diligence condition? Do you really need 4 weeks on financing? You will get a home inspection right away and if you use a good lender, tighter time frames won't be an issue. Make dates as aggressive as possible without compromising your ability to meet these contractual timelines.
5) Use a good lender
Use a local lender, not one with an 800 phone number that is impossible to reach. Good listing agents vet buyers for their ability to close. Your lender needs to take the listing agent's phone call and convince them that you are a solid buyer and that s/he will get your loan closed, and on time too!
I usually like to recommend a lender to my buyers that is proactive enough to call the listing agent after we submit an offer. Again they should verify how easy your loan will be to close. In any situation, we are selling your ability to close this transaction.
6) Use an accelerating clause addendum.
This ensures you won't pay more than a certain amount over another highest bid. The details can be tricky and you will want to use an agent who is a strong negotiator. Most agents won't spend the extra time either explaining or preparing such an addendum. But it could be the key to helping you get the house you want, without overpaying.
The most obvious way to win in a multiple offer situation is to over bid, but paying too much for an asset is not in your best interest. In most cases, your offer is subject to lender appraisal and most over inflated values won't stand the test of an appraisal.
An experienced agent and lender are the keys to helping you navigate the possibility of multiple offers and helping you purchase the home of your dreams. Experience matters in any market, be sure you have the right team behind you.
Call me today to leverage my expertise to your advantage!