Normally you see multiple offers on homes (not foreclosures) in a sellers market, where inventory homes for sale are very limited. We are starting to encounter this now, as I previously blogged. My buyers did go on to find another home that they loved even more and it had been on the market 1 day. We were able to come to an acceptable price and terms within 2 hours and had the contract executed within 6 hours. The sellers did receive another offer during this time but my buyers had the best terms.
When competing in this unusual time of multiple offers in a buyers market you have to have an agent that knows how to compete. This is how I'm successful at securing the winning offer:
- Offer a large earnest money deposit. You are showing the seller you're serious about closing. It's part of your down payment and you are just offering it sooner. This carries a lot of weight for the agent and the seller!
- Write your best offer FIRST. Make your offer strong and don't try to hope the seller will negotiate. Your agent should already know the comps and what percent of list price that neighborhood is selling. Go a little over the list price if the comps are good. Paying slightly more doesn't mean you're paying over market value. Again, your agent should know when it's necessary to do this, based on the neighborhood.
- Show the sellers you're a QUALIFIED buyer. Ask your lender to write you a LOAN PRE-APPROVAL letter. This is different than a pre qualification letter. This will accompany your offer and already being approved, will make you the stronger buyer in the eyes of the seller.
- Give the seller time to move. The seller may be juggling simultaneous moves just like you so offer them 2-3 days to move after closing without expecting a lease back with payment.
- Don't expect a contingency. Sell your home first. If you are looking in the price range that is getting multiple offers, sell your home first. Any qualified agent will know what that price range is for your area. You will not get a home in todays market with a contingency if that price range is receiving multiple offers.
It's so important to have quality representation in real estate. The market is changing rapidly and the North Dallas area will be a new market over the next 12 months. Make sure you have an educated agent!