How to Navigate a Multiple Offer Situation as a Buyer (2023 Update)
If you’re looking to purchase a house in a competitive market, you might find yourself in a multiple offer situation, meaning there is at least one other party interested in the same property as you. This can be stressful for both buyers and sellers, so it’s important to know how to navigate the situation carefully.
When it comes to multiple offers, the listing agent 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 find yourself in this situation and feel like it’s the perfect home, this is your time to go all-in with your best offer. However, it’s essential to remember that every seller has different needs and goals for selling their home beyond just the price. For example, flexibility to close at a later date may be more important to some sellers. In such cases, your agent can assist you in framing the various terms required to make your offer clean, compelling and complete.
Consider the following six tips to make your offer stand out from the pack in a multiple-offer scenario:
1. Agent-client communication is key
Your agent will help you read the situation and understand the current market conditions to assist you in preparing a compelling offer. Keep in mind that successful offers usually involve a combination of factors including price. Also, be upfront with your agent about what you want. Seek their guidance on how to proceed.
2. Get pre-approved
This applies to any buyer in any market, not just buyers in multiple offers. But if you haven’t been pre-approved in a market where multiple offers are prevalent, then you’ve struck out before even stepping into the batter’s box. So, get pre-approved before you start looking. If you are a cash buyer, i.e. not getting a mortgage, have a proof of funds documentation from your financial institution ready.
3. 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.
4. Try to find out what’s important to the seller
Ask your agent to find out the ‘hot buttons’ in the transaction. Maybe it’s a fast closing, or finding a buyer who isn’t going to get hung up on home inspection issues. Being flexible to the seller’s needs will help set your offer apart when multiple offers are on the table.
5. Waive contingencies
There are circumstances where it may make sense to waive certain contingencies in your offer, such as a home inspection, attorney review or financing contingency. 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.
6. 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.
Remember, in a multiple-offer situation, it’s important to be flexible and strategic. With the help of a knowledgeable agent, you can increase your chances of winning the bidding war and moving into the home of your dreams!