Have you heard that competition is fierce among people looking to buy a home in and around Dallas/Fort worth?
Do you want to know what you can do to separate yourself from the competition when a home seller has received multiple offers?
Look no further because in this blog I’m arming you with 12 Tips to Winning in a Multiple Offer Situation
Be sure to watch or read all the way to the end to get the most important tip for competing in a multiple offer situation.
Winning Tip #1
Make sure your agent contacts the seller’s agent to find out what the seller’s actual needs are.
Will price drive their decision?
Do they need a generous leaseback?
Or is there some other hot button that you can push in how your offer is written and presented?
The only way to find out is if your agent actually communicates with the seller’s agent. This may sound pretty obvious, but you’d be surprised how many agents assume they know what sellers want.
Winning Tip #2
Make your highest and best offer as it relates to the sale price of the house.
The reason that I emphasize your highest and best is because you will not know what other buyers have offered. And in turn, the other buyers will not know what your offer is either because, in our market, offers are blind.
Listing agents do not disclose the sale prices or terms of the other offers. You have to bring your a game from the get-go.
Winning Tip #3
Minimize the number of days in the option period.
Why? Because as a buyer you have the unrestricted right to terminate the contract for any reason during the option period.
Show the seller that you mean business by giving yourself enough time to have the home inspected and negotiate repairs and concessions, but do it as quickly as possible.
Winning Tip #4
Since buyers have to pay the seller a fee to have the unrestricted right to terminate during the option period, it makes sense to offer the seller more money for the option period than you would if you were not in a multiple offer situation.
I recommend a minimum of $100 per day, in most situations. And, remember that if you close on the house, the option fee gets credited back to you at closing.
Winning Tip #5
Increase the amount of earnest money that you deposit with the title company.
One percent earnest money is standard in most situations.
If you want to show the seller you’re really serious about buying the house, you can increase that deposit.
In my opinion, this is mostly symbolic because earnest money is refundable if you terminate during the option period or according to some of the other standard terms of our contract. However, some sellers find it appealing.
Winning Tip #6
Use the listing agent or seller’s preferred title company.
Title or escrow is performed by an unbiased third party who helps to facilitate the transaction.
Their rates are regulated by the state, so your costs do not vary much from one provider to the next.
This is a very easy way to appease the listing agent and the seller.
Winning Tip #7
Offer to pay for your own title insurance policy.
Which party pays for the buyer’s title policy is always negotiable.
If you’re not in a multiple offer situation, then it’s customary for the seller to pay for the buyer’s title insurance policy. However, if you are in a multiple offer situation, this is a great way to put more money into the seller’s pocket.
Winning Tip #8
Waive the seller-paid home warranty in your initial offer.
In our market, it is customary for a seller to pay for 1 year of home warranty coverage for a buyer. However, if you waive that fee, you’re putting more money in the seller’s pocket. And, you can always purchase your own home warranty before or after you close on the house.
Winning Tip #9
Attach an appraisal waiver addendum to the contract.
An appraisal waiver gives sellers confidence that they are getting the price that buyer offered for the property whether or not it appraises for the contract price.
Be sure to speak with your agent and lender so that you fully understand the terms of the waiver.
I’m not going to go into more detail here, because how you structure the waiver may be different from one property to the next.
Winning Tip #10
Reduce the number of days that you have to obtain credit approval, or eliminate the need for credit approval completely.
Credit approval is a component of the financing addendum for your contract.
You will need to speak with your lender to determine how to reduce or eliminate this time period. Again, fewer days for financing approval is a way to reduce risk for the seller.
Winning Tip #11
Offer the seller a complimentary leaseback.
A leaseback gives the seller the ability to stay in the home for a pre-determined amount of time, after you close on their property.
Why would a seller need to stay in their home after closing?
Well, if they need the proceeds of this sale to close on their next purchase then they are going to need time to find their next home and close on it.
Also, sometimes sellers want a week or so after closing to have time to pack and organize their move.
Regardless of the reason, if the seller needs a leaseback, and you can accommodate their need, then give them the lease back.
Winning Tip #12
Make sure that you structure your offer so that it meets the seller’s needs, with as few risks as possible.
Depending on the level of competition, you may use one of these tips, all of them, or some combination of the 12.
Communication with the seller’s agent, your agent, and your lender are key to putting yourself in the best position to secure your dream home.