How To Compete & Win Among Multiple Offers
In the current housing market, you may find yourself making an offer on the home you really want, but you’re making it along with other buyers for the same house. That is why it’s important to get knowledgeable about what we can do to get your offer accepted.
To ensure you are prepared and put your best position forward, here are some tips which might help:
Obtain Your Prequalification Letter
A prequalification letter is a must have in today’s real estate market. It will be difficult to compete without it. Make sure to contact your lender to get prequalified prior to shopping for a home. Ensure your agent is provided a copy.
Build a Full and Complete Loan File
Work with your lender to build a complete loan file. This ensures that after your prequalification, your loan file is ready to process as soon as your offer is accepted, leaving the seller confident your financing is secure. This also helps you by understanding your loan options while shopping for your home.
Be Prepared to Move Quickly – Like Lightning Fast!
When you find the right home, time is of the essence and you might not realize it immediately. Rely on your real estate agent to guide you. They understand the real estate market best and how best to proceed when the clock is ticking.
Be Prepared to Compromise
Make a list! Write down must haves and disqualifiers of a home. Include items on which you are willing to compromise – and stick to it. See past the cosmetics of a home and evaluate the bones of the house. It is important to be realistic and trust your agent’s judgment.
Allow your agent to be your agent. Sounds simple right? It can be difficult if you see things one way while your agent is telling you another. Try and remember they are the experts in the field, and you can rely on their experience to guide you. When it comes time for a home inspection, ask your agent about additional inspections which might be beneficial. Request only reasonable or critical repairs. Be flexible on viewing times too; it may give you advantage.
Be Willing to Offer Over List Price & Use The Escalation Clause
Most homes are being sold for over asking price which means you will likely offer over list price to compete. Therefore, make sure you and your agent are looking at homes which fall a little under your maximum price so your agent can offer higher.
Using the escalation clause lets the seller know you are willing to pay an amount higher than their highest offer (they have to prove what their highest offer is by providing a copy) but not to exceed a maximum amount you choose.
Don’t Waive Inspections; Purchase As-Is
Rather than waive inspections, be willing to purchase “As-Is”. Put simply, “As-Is” means you you agree to purchase the home and will not ask the seller for any repairs or concessions. However, you still have an inspection period (10 days) to find potential issues. If there is a major issue or the repair list gets too long, you are able to back out and have your earnest money returned to you.
This approach assures the seller that they are not going to be asked to do minor repairs. In this type of market, taking on these repairs yourself can be the difference between getting your offer accepted or not.
Waive The Appraisal Contingency
Because homes are selling for higher than list price, waiving the appraisal increases the likelihood that your offer will be accepted. Why? With multiple offers driving up the price, the home may not appraise. Rather than the deal with a low appraisal and potentially losing the deal, buyers can waive the appraisal contingency. That said, it is best to put a dollar amount in the contract that you are willing to pay above an appraised value. The offer would state “Buyer agrees to pay up to $5000 above appraisal not to exceed contract price”, for example.
Ask Your Lender to Participate in the Offer Process
Lenders can help strengthen your offer and give confidence to the seller. Real estate agents may have a preferred approach so be sure to ask your agent how they think your lender can help with the offer.
Bottom Line: It’s vital you know exactly how much money you have to work with when planning your offer strategy with your agent. I have the experience and ability to help you win – Let’s get going today!