It amazes me that even experienced Realtors, that have been through the previous housing boom, still prove to be novices when it comes to the multiple offer game.
As our market is heating up, multiple offer situations are becoming more and more abundant. Are you (or your agent) really prepared to play the game to win? Don’t assume the seller will counter, if someone else came in higher than you, their offer may be accepted or worked first and your opportunity will be lost!
What to do…
1. Presenting your best offer.
First and foremost, come in with your best and highest price! Which should include an escalation clause as Kathy T. Mentioned in a previous post Automatic Increase in Offer. Also, be sure to present your loan preapproval letter with the offer. Make sure the letter matches or is better than the financing terms you’ve presented. Consider including a personal letter that may emotionally connect with your seller.
2. Minimize your contingencies.
*Do not include frivolous contingencies such as review of indentures when you already have inspection period built in to the contract, you can be doing your indenture research during this time and eliminate this contingency.
*Consider removing your financing contingency. This can be a risky move, but one that is sure to put you on top if the other terms are equal. Only when you are absolutely sure of your financial ability would you pull out this stop.
3. Ask questions.
Find out the sellers motivations, time frames and what’s important to them. For instance, giving the seller a closing date that’s important to him when you are flexible, might put you ahead.
4. Leave personal property off of the contract.
Check the sellers disclosure for any excluded items the seller may have identified, then write them in as exclusions! Don’t leave room for a seller to have to counter over a minimal item.
5. Be clear and concise
When constructing your offer, be sure your language leaves no room for interpretation. If a seller feels something is not clearly defined they will feel the need to counter to make the correction. When a seller has multiple offers in hand, he may not want to take the risk of losing the other interest while he’s clarifying contractually with you. And on the flip side, every time you engage a counter, the opportunity exists for another buyer to steal the deal in the ninth inning.
Good luck and happy home buying!