How to Win in a Multiple Offer Situation

Dated: January 10 2020

Views: 1573

How to Win in a Multiple Offer Situation

People At Auction Waving Signs

Arrrggghhh! You've found the perfect home only to learn that you’ll be competing with other buyers! If you really want to buy the home you’ll need to make a competitive and compelling offer that the seller can't resist. Here are the 7 steps to making the best case for your offer in a competitive situation.

1. Know the Market

Stay up-to-date on the market so you can react quickly when you see a home you like. Carefully study the CMA (Comparative Market Analysis) that we prepare so you know what similar houses have recently sold for. 

2. Offer a Good Price

You should offer the highest price you’re willing to pay. You can also include an “escalation clause” where you will increase the price by a set amount over other offers.

3. Show That You Can Close

Make sure that you have a current pre-approval from a reputable lender that shows a credit check with verification of income and assets. A substantial down payment shows that any appraisal issues won’t cause delays and affect your ability to buy the house. If you’re paying cash you’ll need to show proof of funds in a financial statement.

4. Present a Clean Offer

Show that you’ll be easy to work with by sending everything the seller needs to make a decision. Include all documents and a fully signed purchase agreement in a single package to send to the seller’s agent. Don’t dribble documents and expect the listing agent to sort things out.

5. Try to Learn What The Seller Needs

Sometimes the listing agent will share the seller’s personal situation, time frame for moving, or specific requirements for selling the house. You might be able to get what you most want by being flexible and accommodating on what the seller needs. For example, you could let the seller choose the closing date. For sellers trying to coordinate a simultaneous sale and purchase, this can be the deciding factor in choosing which offer to accept.

6. Consider the Contingencies You're Asking For

  • Finance Contingency: If you feel like the home is priced fairly, and you can afford to do so, you can waive the appraisal contingency. Your lender will still do an appraisal, but if it’s lower than the contract purchase price, you’ll make up the difference in your down payment.
  • Inspection Contingency: It’s never a good idea to waive a professional home inspection. But you could offer to accept the house “as-is” as long as there are no serious issues found during the inspection. You reserve the right to cancel but agree not to nickel and dime the seller with repair requests.
  • Home Sale Contingency: It can be difficult to win in a multiple offer situation if your offer is contingent on selling your current home. If you can’t drop this contingency, you’ll have to show the seller that your buyer has moved through their contingencies and is in a strong position to close.

7. Buyer Love Letter - Yes or No?

We usually advise buyers to avoid making emotional or personal appeals to the seller. Even the most well-intentioned and heartfelt buyer letters can backfire. You can never be sure if the seller will interpret a buyer letter as a genuine expression of interest or a craven attempt to manipulate an already stressful situation. 

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Leslie Ebersole

I'm not happy unless I'm busy helping people. As the founder of the BRIX Group, I work as a real estate agent with eXp Realty in the western suburbs of Chicago, and as a marketing consultant to teams ....

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