Five Ways to Win When There are Multiple Offers
We are seeing multiple offers again in the Washington, D.C. metro area. As demand continues to surpass inventory, here are five tips to help your offer stand out from the competition!
1. Make a realistic offer.
It's really hard for some buyers to offer asking price or above – bargaining is in our genes! But if you're in a tight market – and the house is fairly priced – then come in with a realistic offer that makes you competitive. Don't let a few thousand dollars take you out of consideration.
2. Show them you're serious.
Clients and agents still debate the 'perfect' amount to put down, but when you're in a multiple offer situation, more money means you're more serious. If you were a seller and had to decide between two offers, one with $2,000 down and one with $15,000 down, which one would you take? Discuss the proper amount with your agent (the more you put down, the more you're at risk if the transaction goes awry), but put enough down to clearly convey that you mean business.
3. Go in with a reputable lender.
While more financing options are generally considered a good thing for the housing market, the proliferation of lenders have led to some challenges for some buyers. Sellers (and their agents) are looking for solid financing with lenders they know and trust. Ask friends and talk to your agent in advance about who has a good reputation in your community – choose two or three, do your research, and find the right match. Make sure your offer is one in which the seller will have total confidence.
4. Be prepared to bridge the appraisal gap.
When there are multiple bids with escalation clauses, what happens if you offer more than the house appraises for? Be cautious, but don't panic. A lower appraisal could be due to any number of factors, including an out-of-town appraiser not completely understanding the neighborhood and recent comps not keeping up with rising home values. Consider a clause that says (for example) "If property does not appraise, buyer will cover the difference up to $8,000." If bidding pushes the price of a home up, this will protect you and give the seller peace of mind. Be careful, though – don't offer more than reason would dictate or more than your cash reserves can stand.
5. Write a cover letter.
It's human nature to want to work with someone you know and like – home sellers are no exception! Write a letter telling the seller a little bit about yourself, why you love the house, and why you think you're the best fit for the property. A sincere note with a few details may make the difference between losing the home and getting your offer accepted.