You’ve found the perfect home…the size, the location, the price; everything about this house screams “home”. You have visually decorated the home and have already envisioned hosting holiday parties and family-get-togethers at your new pad…only to find out after placing your offer, that there a handful of others eyeing your home as well. Your heart skips a beat and you feel like you’ve just gotten off of the Texas Giant at Six Flags. You want this home; it already feels like YOURS. You have already “emotionally moved in”. What do you do?
Chances are, if you’ve shopped homes for sale in North Texas lately, you may have recently found yourself in this situation. With both inventory and interest rates being lower than they have been in YEARS, coupled with the rise of the toughest competition ever-the cash buyer-multiple offers are very common right now. The key to winning is knowing how to give yourself the competitive edge to stand out. Below are a few keys to winning in a multiple offer scenario:
1) Dot Your I’s and Cross Your T’s.
Write a clean offer…make sure every blank (required) is filled in, in the contract. Nothing says unprofessional / careless / inexperienced than a partially put-together offer. If an agent fails to fill out the commission blank to watch out for their own money, do you think they are watching out for yours?
2) Submit the Offer with your Preapproval Letter and Copy of Earnest Money and Option Money Checks.
This sounds self-explanatory and (in my opinion) should really be a crucial step in submitting “any” offer…not just one in a multiple-offer scenario, but you’d be surprised how many offers (at least to me) are turned in without these key items.
3) Shorten Your Option Period
Knowing the general option period is 10 days, submit a shorter option period (after confirming with your agent that you can have an inspector lined up ASAP). If you and your agent are “on the ball” you can normally get your inspection and all repair negotiations complete within 5 or so days. The contract / home goes to “Pending” after your option period, so the shorter your option period, the shorter time the seller has to wait on pins and needles wondering if you are going to back out. (Make sure your agent puts a “respond by” or “must agree by X date” on the amendments to shorten response time by the “other” party as well. *I never recommend foregoing the option or inspection period completely*. Even if you are a full-time investor with a renovation crew…there are always “unknowns” to be aware of. After all, the offer you initially placed on the property was the price you were willing to pay “in it’s current known condition”. If there are electrical hazards, plumbing problems and a roof that is about to fall down, those items may impact the value of the property.
4) Pay More of an Option Fee
With the standard option fee being $100.00 in this area for the general 10-day option period, sometimes, offering only $50.00-$100.00 more to the seller is enough to make yourself stand out from the other offers (obviously, coupled alone with some of the below and above suggestions as well).
5) Put More Earnest $ Down
This shows the seller you are serious and want to move forward. This amount goes towards your down-payment anyway and you get it back in the event the contract falls through (within guidelines).
6) Put Down More of a Down-Payment
If you have it to spare, this eases the seller’s mind that once the home is tied up in a contract that there is probably less of a chance that “your” financing will fall through if you’re putting down $120,000 opposed to someone only putting down 3.5% on an FHA loan. While we all may not have $120,000 to put down on the home that we want, the contract with the larger money “down” will always appear stronger. (Example: Last Friday, I listed a home in Plano. On Saturday, we had 7 showings and two full-price offers, with a potential 3rd as a back-up. By Saturday night, we had the home under contract with the buyer who only had an 80k note on the $208,500 list-price.
7) Waive as Many Contingencies as You Can
“Contingent upon financing, contingent upon the sale of another home, etc, etc”. Obviously, each of these situations is unique with each individual buyer, so make sure your Realtor is well-informed of your situation so that he or she can look out for your best interests.
8) Agent Relationships
This may seem like an unfair edge, but it does happen. A Realtor who has been in the business a while and knows many other agents, is a good networker, or has had good working experiences with many other Realtors is the agent you want to represent you. The listing agent just may pick your contract based upon the working knowledge with your Realtor and know them able to get the contract to the finish line, meanwhile making he or she look better to “their” client.
9) Cash is Still King
If you CAN pay cash, do it. The seller will know you can close faster and will have no financing hurdles. In situations where this is not an option, pay more than list-price. Obviously, do some research with your Realtor to know the going rate and average price-per sf and what it’s selling for in the area that you are buying your home in. Sometimes, all it takes is an extra $100.00-$500.00 to put yourself in first place.
Many people have a problem paying not only full price, but over. They could not fathom not getting “the best deal”. However, if it’s within reason of what others are selling for, and it makes sense….sometimes the best “deal” is not just in price-it’s in getting the home you want.
10) Write a Letter to the Seller(s) Telling Them Why You Want the Home.
Selling a home, especially after living in one for a few years, having memories, children growing up (and sometimes out) of the home is a very emotional experience. If you write a letter of the reason you love the home and what you see yourself doing in the home and why it’s important to you…they just may feel an emotional connection with you, and want to work with you (even if not the highest offer) opposed to the parties to the other offers.
I hope these tips come in handy if you’re reading this and embarking on your own home-buying journey. Don’t forget to “sign up for my blog updates” for other helpful home-buying and selling tips.
Had your own multiple-offer situation in which you won? Feel free to comment and share your story and how you won! I would love to hear from you!
Amy S. Arey, Realtor | Halo Group Realty, LLC | Watters Creek
825 Market St, STE 230 | Allen, TX 75013
Aarey@HaloAgent.com | 214.901.1341-Cell