Winning in a Multi Offer Market. It Isn’t Easy For Uninformed Buyers.
Recently, many prospective home buyers have faced disappointing outcomes when finding themselves on the losing side of multiple-offer situations. How do home buyers win over the seller with an amazing offer?
In today’s ultra competitive market, losing out on an accepted offer is becoming a more common reality. It can take weeks or months to discover the perfect home. You decide on an offer price certain to put you in a great position, sign the offer contract, only to later learn that the seller accepted another offer.
And so, the exhausting search continues.
When submitting an offer it’s easy for buyers to fixate on the price tag, but a trained realtor knows price is only one aspect of purchasing, and in a scenario with multiple offers, other variables within the offer hold an even greater impact.
The truth is, in today’s market it’s not uncommon for a listing to receive upwards of twenty offers! Which is a direct result of a considerable lack of inventory. It’s a seller’s market out there. The good news is, someone has to be the winning offer. And as long as you have the right agent, there is no reason why it shouldn’t be you!
Get Pre-Qualified From A Reliable Lender
Coming into an offer pre-qualified places you in a strong position. Coming into an offer pre-qualified from a lender with an excellent reputation will put you in an even better spot and can ease the buying process. One of our top agents, Heather Waters, explains, “My number one goal for all my transactions is to have it go as smoothly as possible with as little stress as possible. Using our preferred lenders is the best way we can guarantee this. They are professionals and are available to assist us even outside of typical business hours. They close on time. You’ll leave so happy that you will want to buy another home.”
And while it definitely helps you, the buyer, finding a lender that’s easy to work with makes the whole situation more attractive to the seller as well. And if the lender has a reputation of closing deals on time, the seller can feel confident knowing there’s little risk the mortgage financing will fall through.
Know your Agent’s Support Team
It takes a village. The team is more than just your agent. The loan officers, showing agents, inspectors, appraisers, and escrow officers are all involved in throughout the process. You want an agent with a well-experienced, efficient, and dedicated team of professionals backing them. Ask them who they plan to work with, and feel free to request past client testimonials.
Work with a Confident Agent to help set Realistic Expectations
Confidence and expectation mean everything in a multiple offer situation. It’s crucial that your agent is straightforward and leads with honesty. Remember, your offer is likely competing with dozens of other offers. When there are this many players in the game, starting below asking price won’t cut it, and if that’s the case, the agent must be upfront and realistic with you.
It may be best to start with your highest and best offer right out the gate. Trust your agent to help make it an attractive proposition and when possible, be willing to go over the seller’s asking price. Ask your agent for competitive market research. Some sellers list below to generate multiple offers. Because of that, an offer above the listed price isn’t always overpriced.
Even still, there’s a chance you and your agent do everything perfectly, and another buyer arrives with an offer 40% above list price, cash in hand, and even fewer contingencies than your offer had. In this case, it simply wasn’t meant to be. This is why it is your agent’s duty to inform you what it may take and to clearly define the expectations required when entering such a competitive market.
Your agent should provide well-informed advice backed by market research and experience- even if they know it’s not necessarily what you want to hear.
For instance, it’s best not to anticipate the seller paying your closing fees. Instead, ask your agent what costs are customary for the seller to cover. And prepare an offer that covers several of those if possible, such as the title policies or escrow fees.
A Fully Prepared Agent can Make or Break the Deal
An agent needs to know the Purchase & Sales Agreement inside and out in order to provide every option for the buyer to win and offer. A thorough agent can break down the buying process step by step to help you make the most informed decisions. A great agent also knows what is required by law to disclose and conversely, what possible obstacles to be aware of. Missing one of these details can land you in a home with some serious issues. Your understanding of these risks should be your agent’s top priority.
Understand and be Prepared to Drop the Contingencies
Perhaps your previous agent didn’t tell you waiving limited repairs is an option; note that this might be a more attractive option for the seller and a way to separate yourself from the pack. Contingencies provide loopholes or insurances for the buyer to back out. In a competitive market such as we are living in, you want to create an offer with as few contingencies as possible. A well-informed agent will be aware of these contingencies, discuss with you your options, and you get to choose what is within your comfort zone. A good example of this is that an agent can provide comparable sales in the neighborhood to determine if you want to waive the appraisal contingency.
“When trying to win your dream house in multiple offers, there are several ways you can cut the pie. Some buyers wish to keep the protection of inspection and appraisal contingencies, so they offer over asking price while other buyers would rather risk their contingencies especially if they don’t have much wiggle room with the budget. Both ways can win you the house, I always just tell the buyers, offer a price that you wouldn’t regret not offering more if you don’t get it.” – Heather Waters
The Necessity of Clear Communication
A common issue many home buyers experience is the struggle of contacting their agents. Whether it be via call, text, or email, many agents simply will not respond. In today’s quick housing market, it’s imperative to move fast! Especially when you’ve found the home you want to make a move on. A lack of communication means a missed opportunity. Great agent’s simply make themselves available to their clients. Period.
After you’ve thought over an offer, you and your agent need to discuss any of your concerns to take those worries to the listing agent.
Surprisingly, sometimes a listing agent will flat out reveal what it’s going to take to sell- the exact conditions that need to be met. The trick requires an agent who knows what questions to ask and will pick up the phone. These could be requests of the seller or simply to set expectations. Perhaps it’s a fast closing? Or more time after close for the seller to move without penalty—move-in dates matter. Be flexible with the seller’s needs. It may put you out for a bit, but it’s one way to help give yourself the best chance at an accepted offer.
Sellers truly want a few things: to get the best price for their home, the lowest amount of risk of the sale falling through, and to close or move on a timeline that best suits their own needs. Understanding these motivating factors can truly separate your offer from the others. Communication between agents puts you in a better position to have your offer accepted. The best agents understand this and work to understand the variables it takes to seal the deal beyond just the sales price.
Finding the Right Approach with Creativity
A well informed agent understands how to take the options at hand and work with the listing agent to provide creative solutions. An example might be offering to waive inspection repairs altogether or only asking for the seller to repair “big-ticket” items over say, $1000. Another creative way of positioning your offer may be to review with your lender the accessible cash reserves you have and waiving the appraisal to as an assurance to the seller that you’re not going to back out based on the updated price. You could even offer to pay the difference between appraisal and sales price, up to a predetermined amount,if the appraisal comes back at a value less than the offered sales price. Many buyers today are making inflated offers with the intention of tearing down the offer price after the appraisal inevitably comes back with a value less than the offer price. You can circumvent this and separate your offers from the pack by showing respect to the seller, providing confidence that the offer you submitted will be honored, and your initial offer price wasn’t just a ploy to beat the competing offers.
It’s important to remember most homeowners have an emotional attachment to the house and want to know their home will be going to an acceptable new homeowner. Don’t be afraid to write a letter about your intentions and highlight the love you have for their home. Include a photo of yourself and your family. It may feel a bit cheesy, but it can make quite the emotional impact on the seller.
Hire Nashville Home Guru!
All of our agents are trained in these practices and ready to put our clients first. We are eager to guide you along the process with our experience and expertise. Let us help you succeed in buying or selling your home in this fast-paced and ultra competitive market. Give Us Call at 615-682-1718. We Would Love To Help.