How Can I Win in a Multiple-Offer Scenario?
From pre-approval to writing letters, there is plenty buyers can do to win.
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Homebuyers: Don’t be discouraged by this competitive seller’s market. Here are my five tips for winning the house you love:
1. Get pre-approved now. In a low inventory market, you may find the home you love on your first day out, and waiting to get pre-approved is only going to delay your ability to make an offer and buy your dream house. Let the lender run your credit and go through the whole application process because this is your launching pad to a smooth home purchase.
2. Understand your wants and needs. And know where you might have to concede a little. Imagine a triangle, on the top of which is ‘location,’ with ‘condition’ in the left corner and ‘price’ in the right corner. As a buyer, you need to think long and hard about which of these three areas you’re willing to compromise.
So, hypothetically, if I found the location you desire at the price range you want to be in, but you’d have to give a little on the condition, is that okay? What if I could get you the condition and location you want but you have to up your price just a bit? These are the types of scenarios you need to prepare for; reflecting on your priorities well in advance will save you time and money during the home search process.
3. Write a letter to accompany your offer. In just a few paragraphs, you can outline what you, the buyer, love about the seller’s property, why you’re moving, and how the home will serve your family wonderfully. You’ll also want to thank them, not only for the opportunity to see their home but to possibly buy it as well. It’s a chance to maybe stroke the seller’s ego, and build a little bit of an emotional connection.
"Reflecting on your priorities well in advance will save you time and money during the home search process."
4. Think about the terms of your offer. Of course, there are price and closing costs, but what about closing dates, appraisal, inspection, financing contingencies, and other stipulations? Have your agent call the seller’s listing agent and ask them what the seller's desired closing date is. Call your lender and find out how many days you’ll really need for your financing and appraisal contingencies, and then make sure that the appraisal contingency is as short as possible.
In a market like this, when we need to get creative, we’re not even including appraisal and inspection contingencies, we’re just focusing on the due diligence period wherein the buyer can terminate for any reason. Maybe we negotiate a 10- to 14-day due diligence window in which we get your appraisal and inspection done, and get as far into the financing as possible. Remember: It’s not all about price.
5. Work with an experienced Realtor. Just the other day, I was representing a buyer who was in a multiple-offer situation. My buyer still needs to sell their house—they haven’t even listed it yet. The other buyer involved in the situation also needs to sell their house and is already under contract. Honestly, most agents would have given up; they’d call their buyer and say, “I’m sorry, but there’s no reason to even write an offer. This other buyer already has us beat.”
Instead of throwing in the towel, we decided to find out what some easy wins for the seller would be, then included them in our offer. My buyer won the house and can rest easy knowing that they have a new home ready to move into while we focus on getting their current house sold. I pitched my buyer to the seller in this scenario well. My buyer had written a beautiful letter, and took advantage of nearly everything else I’ve already discussed.
If you have further questions about getting your offer accepted or real estate in general, please reach out via phone or email. I would love to help you.