Multiple Offer Situations are Commonplace for Buyers to Encounter
If you know someone who’s sold their home this recently, you’ve likely heard a bidding war story or two. According to a Coldwell Banker study, nearly half of recent home deals came with multiple offers.
This has occurred fairly often since the local real estate market began its recovery in 2011 and is a refreshing change for many sellers who previously wondered if anyone would make an offer on their property.
Conversely, of course, it has become increasingly frustrating to well-qualified buyers who repeatedly are outbid in their attempts to buy a home and are rejected time and again.
The following are some suggestions based on my having participated in hundreds of multiple offer negotiations, and our evolution of a system that has proven its effectiveness for close to one hundred clients.
Buyer Tips to Help Succeed in Out-Bidding Competitors
- Be as close to being an “all-cash” buyer as you can, ideally either actually having the cash available or, at a minimum, being fully approved for financing before writing an offer.
- Select an agent who has successfully guided many other buyers in multiple-offer situations.
- Know the market inventory well and become familiar with what has recently sold by attending open houses, etc.
- Have a family or personal photo ready to have presented with your offer, as well as an introductory letter that your agent can help you prepare.
- Be as rational and disciplined as you can, and be willing to either step up or pull back depending on the circumstances.
- Take the long view, remembering that you may be living there for many years. For example, the house can be changed in various ways, but the location cannot.
- Ask your agent to counsel you on contract details that may improve your position at little cost or risk to you. A seasoned agent will know ways to make your offer stand out over others.
- Be prepared to make decisive decisions in a short amount of time – you might not get another chance.
- Consider that your cost of ownership may be largely the monthly payments, whereas the seller’s sale price is all they receive and will have toward their next purchase.
- Remember, regardless of how many attempts might not succeed, there will almost always be others coming on the market in due time.
Michael Edlen has been involved in multiple offer negotiations since 1987, including several that had 20-35 offers. He and his team have carefully developed strategies for multiple offers when working with both buyers and sellers.