How to navigate a multiple offer situation as a buyer
Multiple offer situations can be very stressful for both buyers and sellers if not handled carefully.
What exactly does it mean to be in multiple offers? As a buyer, it means there is at least one other buyer that has submitted an offer to purchase the same property as you. In some cases, there might even be several buyers involved.
When it comes to this scenario, the listing broker may advise the seller to request “best and final” offers. In this case, buyers are asked to submit their strongest offer by a set date and time, at which point the seller will review all offers, compare the various terms, and choose which one to accept.
If you’ve found the perfect home, this is your time to shine! Remember, though, every seller has different needs and goals in the sale of their home – just as you have your own needs and goals for your purchase. And this goes beyond just price.
Closing date, for example, may be an offer term that carries more weight with some sellers than price. Your broker will help you understand and complete the various terms so your offer is complete, clean and compelling.
Should you ever find yourself in a multiple offer situation, here are a few tips to make your offer stand out from the others:
Consult with a broker
Your broker will help you understand the current market conditions, including pricing of homes, and can assist you in preparing a compelling “package” to present to the seller. Keep in mind that going in with a high-priced offer is not always the way to win in multiple offers, so seek guidance as to how to proceed.
A mortgage pre-approval is essential in a competitive home-buying environment because it immediately shows the seller that you’re a qualified buyer. Paying cash? Have a proof of funds document ready from your financial institution.
Start with your best offer
Avoid low-ball offers, as you might not get the opportunity to negotiate. Go in with the mindset that you only have one chance to present your strongest offer.
Find out what’s important to the seller
Ask your broker to find out the ‘hot buttons’ in the transaction. Maybe it’s a fast closing, or maybe it’s a buyer that will not “nickel and dime” on home inspection issues. Being flexible with the seller’s needs will help set your offer apart from the rest.
Establish a personal connection
Buying or selling something as important and personal as a home is an emotional experience, so establishing a connection with the seller could potentially give you the edge over another buyer.
There are circumstances where it may make sense to waive certain contingencies in your offer, such as a home inspection. Generally, the fewer the contingencies, the more attractive the offer. If you do opt to waive any of the contingencies, just be sure to understand the potential risks involved.
Increase your earnest money
By increasing your earnest money deposit, you’ll show the seller you are serious about closing and will not back out of the transaction.