What moves should you be making in terms of buying or selling real estate during and after the coronavirus pandemic? We’re living in unprecedented times with the global coronavirus
6 Tips to Help Homebuyers Succeed in a Multiple Offer Situation
Dated: March 26 2020
The real estate market is hotter than ever with interest rates being quite low. So what does this mean for homebuyers? Many newly listed homes are being sold within months or even days of being on the market, and more often than not, newly listed homes receive multiple offers - leaving homebuyers in what feels like a fast-paced competition for the home of their dreams. This is excellent news for sellers, but it leaves homebuyers at a slight disadvantage. In this situation, it’s incredibly important to work with a real estate agent who has experience with multiple offer situations.
You’ll hear about various negotiating strategies when it comes to real estate, but there are advantages and disadvantages to many of them in a multiple offer situation. For instance, if you put a low initial offer down, you may end up buying the property for less than the listed price. This is fantastic. But in a multiple offer situation, you may miss out because someone else offers the full price and gets accepted within the same day. So what can you do to succeed in a multiple offer situation? Here are 6 tips to help you out:
- Learn About the Property and the Seller
Before you put in an offer, find out everything you possibly can about the property and the seller. You’ll want to identify market trends, including what similar homes are selling for, how long homes stay on the market in the neighborhood, and other details that give you insight into the situation. As for learning about the seller, find out if they’re looking to move quickly or willing to take their time for the right price.
Once you’ve learned about the property and the seller, it’s time to establish your “bottom line” in terms of the contract. What are you willing to pay? What are your priorities in terms of closing/moving in? Be firm with yourself and don’t compromise what you want simply because the pressure is on.
- Get Pre-Approved for a Mortgage
Keep in mind, there’s a big difference between pre-approval and pre-qualification. In most cases, pre-qualification involves the lender looking at the buyer’s credit information and issuing a letter. This isn’t as solid as having pre-approval, which is a more involved process but more desirable when it comes to buying a home. When you get pre-approval, you’ll be required to show bank statements, pay stubs, and other information to confirm your income and employment.
When you’re up against other homebuyers, pre-approval is invaluable as it shows you have the ability to actually follow through with the offer. If other individuals in the situation don’t have this, you will stand out.
- Look at Homes Priced Beneath Your Budget
If you’re looking in a seller’s market when there tends to be multiple offer situations, start your search a bit lower than your budget. You don’t want to find your dream home that’s priced as high as you’re willing to go and get into a bidding war on it. Otherwise, you’ll find yourself upset when you’re unable to compete, or worse, counteroffer in a manner that’s beyond what you can reasonably afford. Remember, you can’t always bargain your way to the price you want.
In a buyer’s market, this might be possible, but in a situation with multiple offers, you want to be able to counteroffer without going beyond your means. Ask your real estate agent how much homes in the area/market typically sell for in terms of the asking price. If they usually go over or under, you want to be prepared.
- Avoid Having Too Many Contingencies
A buyer has the ability to make a purchase offer contingent on various criteria, such as repairs, closing costs, and more. If you’re in a multiple offer situation, you will want to avoid having too many contingencies (or any at all). You don’t want your offer to be less attractive than someone else who offered the same price simply because of contingencies. When you’re cutting back on contingencies, consider very carefully before you forego a home inspection.
Although foregoing a home inspection can be appealing to a seller, especially if they’re looking to move quickly, it’s usually best to avoid this as you don’t want to end up with hundreds or even thousands of dollars worth of repairs on your hands.
- Show You Can Absolutely Close the Deal
Even in a multiple offer situation, sellers want to know the offer they’re accepting will close escrow. Sure, they might have multiple people offering to give more than you, but if you’re showing that you can absolutely close the deal with no problems, they will likely find your offer more appealing than the rest. So how can you show your ability to close? First and foremost, your pre-approval letter should be ready.
Next, make sure you have proof of cash to close, as well as evidence of your credit score. You can also write an offer letter detailing what the house means to you/your future. This is your chance to connect with the seller, which is important as they likely have some emotional ties to the home.
- Prepare for the Worst
Last but not least, prepare for the worst. If you’ve used all of the tips above, you’ll have a good chance at winning the multiple offer situation. But make sure you have other options in mind so you don’t get too upset if things don’t work out. Multiple offer situations can be challenging and emotional at best, but if you have a backup, you can walk away feeling positive about the effort you put in.
Whether you’re looking to buy or sell a home in Virginia Beach, VA, Give us a call at 757-350-1149 or send us an email at firstname.lastname@example.org to start planning your next move now! I’m here to answer any questions you may have about your real estate goals.
Latest Blog Posts
Finding the Right Virginia Beach Real Estate Agent Can Be Tricky, But Don’t Rush the Process… Whether you’re looking to buy or sell a home, it’s a time-consuming
Selling a home is a huge financial transaction, and more often than not, it’s an emotional one that can leave you feeling confused. When you’re getting ready to sell your house,&
The real estate market is hotter than ever with interest rates being quite low. So what does this mean for homebuyers? Many newly listed homes are being sold within months or even days of