The multiple-offer scenario is a seller’s dream and a buyer’s nightmare. Although multiple-offer situations can be discouraging, all is not lost, as long as you know how to sweeten the pot with a winning strategy.
Let the Money Do the Talking
There are a number of ways you can use money to make your offer more appealing, including:
Earnest Money Deposit
Help ease a seller’s mind by offering a large earnest money deposit. This is part of your down payment and will let the seller know you are very keen on getting the house. It provides money up front towards the purchase as a clear act of your intent to purchase the home.
Appraisal and Sales Price
If there is an indication the house might not be appraised at the offer price, consider paying the difference in cash.
Your Best Offer
This is particularly important in a seller’s market, as multiple offers can top 20 when inventory is very low. Put in the highest price that you can afford based on a comparative market analysis, so you don’t overpay. The chances are that the seller’s agent has set a lower price to encourage multiple offers, so an offer above asking will not always mean you are overpaying.
Cover More Costs
Offer to pay for costs paid for by the seller, such as title policies, escrow fees, or transfer fees.
Loan Preapproval Letter
Make sure you have a loan preapproval letter to show the seller you qualify for the mortgage required to purchase their home. This will help your offer stand out.
More Moving Time
The time between buying and selling is always a challenge. Offer the seller more time to move out, with a few more days after closing. It is no skin off your nose and provides the seller with a little bit less stress. It is also less likely other offers will include this bonus.
Be More Flexible on Contingencies
It is never a good idea to waive a home inspection. However, you can be more flexible on certain contingencies including:
Tightening the 10 days for lead-based paint inspection
Tightening the time for a home inspection
Waiving the loan approval contingency as long as you have a solid loan in place
The possibility of waiving the appraisal contingency
Look for Advantages
Some advantages you might have could include:
First-time buyers do not require a contingency of sale
Longer than usual escrow periods
A letter to the buyer expressing your emotional attachment to the home
Counter Offers & Bidding Wars
Counteroffers are usually a given. The key is to avoid getting into a bidding war, no matter how much you want to win. This is where the agent should take over and help the buyer make the right decisions. Removing emotion and setting a limit for how much you are willing to pay will help avoid overpaying for the property.
Although multiple offers is not the ideal scenario when buying a home, using these tips will help you come out on the winning side of the process.
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