Multiple Offers Becoming More Common
Last year, we started seeing a few multiple offer situations pop-up, but since the beginning of the year, those numbers have increased. More and more, a home that is well priced and looks good is finding itself in a multiple offer situation. Only time will tell what this year will look like for San Antonio real estate, but early indications make it look like we’ll be seeing a seller’s market through the year. While this is great news for sellers, it can often be frustrating for buyers so we’d like to offer you some helpful tips about how to deal with multiple offers and a seller’s market.
Multiple Offers – Dos
The first thing you should do when your agent calls and tells you that there are multiple offers on a property you want to buy is to take a deep breath. It’s easy to get caught up and panic a bit, so a deep breath will serve you well. You’re going to need to act fast, but you don’t want to make rash decisions.
Think about the home – can you live without it or is it “the one?” If it’s the one, then you’re going to need to get serious real fast. If this property is something you can live without, then you might want to consider moving on.
Have your real estate agent run the numbers again. You want to know that the house you’re about to up your offer on is actually worth what you’re going to offer. Making an offer that is too high can cause appraisal problems down the road, so you don’t want to get in over your head.
Take a look at the details of your offer – is there anywhere you can trim the fat? One of the things buyers tend to forget is the big picture of their offer. It’s not just about price. Are you asking for closing costs, home warranties, title policy, etc.? Each one of these items take away from the sellers’ bottom line and may cause them to choose a lower offer with less concessions over your offer. Think big picture to get the best results.
Rewrite the entire offer with your agent. While it is possible to cross out items and make corrections and initial the changes, a clean looking contract has a much different effect than one with scratches and scribbles all over it. Sure the amended contract is still valid and will work just fine, but perception is a big factor in sellers’ decisions.
Listen to your agent and ask questions. Real estate agents do this for a living and often have a “gut feeling” about things. Their intuition isn’t always right, but take it into consideration when making decisions.
Multiple Offers – Don’ts
See the first item on the “Dos” list – don’t panic. Panic won’t help you acquire the house, so stay calm and work through this.
Don’t throw money at the problem. Sure, you’re probably going to have to come up in price, but overpaying is worse than having to find another house to make an offer on.
Don’t just raise your offer price. As mentioned above, look for other ways to sweeten the deal. Always remember the sellers’ bottom line is what matters to them most.
Don’t use an escalation clause in Texas unless you’re ready to hire an attorney. Watch this video to understand why.
Multiple Offers if You’re a Seller
Of course, if you’re a seller, a multiple offer situation can be a great thing. Take time to review each offer and remember to look past the offer price to see what your net will be after all concessions are taken into consideration. You and your agent will most likely want to take all the offers and ask each buyers’ agent to submit their “highest and best” offer. This will often help clear out some of the low offers and complications of concessions like seller paid closing costs and other contract items that might take away from your bottom line. Remember though, if there’s a loan involved, the home will still need to appraise, so don’t let a huge offer price derail your plans on moving. If the home doesn’t appraise, you might still wind up being back on the market without a sale. You should also consider soliciting back-up offers. They work simply by placing a buyer second in line – if the first contract falls through, their contract becomes the valid contract and work starts from there. Whatever happens, hopefully you’ll be able to sell your home for a great price and get you on your way to a new home.
image courtesy of nan palmero
