Winning A Multiple Offer Situation
What is a multiple offer situation? Imagine finding your dream home and putting an offer on it. Now imagine seven other people finding the same dream home and also putting offers in on it at the exact same time. This happens constantly, and without a competent agent and a strategic plan of action, losing the house is likely to be your reality. We’ve got a few tips to educate you on winning a multiple offer situation and why choosing the right Realtor from the start can pay off big time in the end.
Choose a Realtor With A Good Reputation
Start by choosing a Realtor who is a good communicator and negotiator. Strong communication with the listing agent from before you even view the home creates a relationship of cooperation. An agent who is on time, accommodating, provides feedback, and most importantly, knows the inner workings of real estate inside and out is crucial. Good communication shows the listing agent they are working with a professional and that the process all the way through closing will be pleasant for everyone involved.
Also, selecting an agent with sufficient support staff is optimal. It’s easy to drop the ball when working on a real estate deal. An agent with a team that runs efficiently will ensure that a deal always receives the attention it deserves.
Have All Of Your Ducks In A Row
For a buyer, a solid mortgage pre-approval is a must.
Notice we said pre-approval, not pre-qualification.
To be pre-qualified, you’ll need to have spoken with a lender, have your income verified, and the lender will need to have pulled a credit report. All of these things together give the lender a general idea of how much a buyer can borrow.
Pre-approvals are much more in-depth. A pre-approval means that a buyer has provided financial documents to the lender, and they’ve taken a thorough, complete—and verifiable—look at the borrower’s finances. Savvy listing agents will always favor a pre-approval over a pre-qualification. In addition to a pre-approval showing the seller that you have purchasing power, it also tells them that you are further along in the process, which means you can close faster.
In most cases, sellers favor a faster closing—and if that’s the case, you’ll want to be ready to close as quickly as possible, too. However, this isn’t always true. Before submitting your offer, your agent should call the listing agent and ask them what the seller wants. Would an extended closing date suit them better, or are they in a hurry to move out? Accommodating the seller’s time frame could give you a leg up over someone who didn’t do their due diligence.
The Listing Agent Rules
To win the keys to the kingdom (a.k.a. your potential dream home), you’ll need an agent that knows how to treat the listing agent with respect and follow their lead. You may have to wait hours, sometimes days, for an answer. It would be best if you had an agent that can be patient while also checking in without being overbearing. Working with the listing agent and learning their communication style is essential. An agent that can let the listing agent lead while also advocating for you is a huge plus.
Remember, choosing an offer is always up to the seller; agents don’t decide which offer is accepted. But in presenting proposals to the seller, the seller’s agent may put in a good word for you, relaying to their client how easy it’s been to work with your agent. Professionalism and common courtesy give you an edge over any buyers or agents who’ve been uncooperative or unfriendly from the start. Winning a multiple offer situation often requires winning over the listing agent first.
Price Doesn’t Always Win
Offering the right price is the first step to writing a winning offer. After all, the seller’s ultimate goal is to get the most money for their property.
Therefore, sellers often look at the highest-priced offers first. However, several other factors add to an offer’s value for the seller.
For example, will the seller need to stay in their home by utilizing a leaseback after closing? Allowing this may save the seller stress and money. How about the home inspection? You could elect to do an inspection for informational purposes only. Doing so protects your interests by allowing you to inspect the home and discover any potential problems that may be deal-breakers. But the benefit for the seller in this scenario is they won’t have to make repairs or credit money for repairs. What about closing costs? Do not, I repeat, DO NOT ask the seller to pay your closing costs. In fact, if you really want to win a bidding war, and it’s fair, and in your budget, you can offer to pay the seller’s half of the closing costs as well as your own.
Good Agents Like Us Know The Secrets
An agent that is educated and experienced will not only have the ability to work with the sellers during a multiple offer situation, but they’ll also have a few tricks up their sleeve.
Agents who are expert negotiators will be able to make deals happen that other agents can’t. They may use secret weapons like an escalation clause, which tells the buyer that you will pay a set price over and above the highest offer up to a certain amount. So you might say that you’ll offer $1,000 over the highest offer received, up to a certain amount. Many agents don’t use this because they don’t understand how it works or even know it exists, plus there is a lot of room for error with clauses like these.
An experienced Realtor can also remind a listing agent to consider the net proceeds of an offer, not just the purchase price. If a competing offer is higher than yours, but they’re asking for closing costs to be covered, the seller may net a lower price from that offer than your offer.
Living Houston Wins Multiple Offer Situations
Not only are Living Houston’s agents trained in negotiation, but we operate at the highest level of professionalism. When researching an agent to represent you in buying a home, don’t just consider the obvious. Think about all the potential scenarios that you may find yourself in, and then ask yourself who you want to be representing you if any of them come to fruition. We promise you the agents at Living Houston will be at the top of your list.
