Multiple Offer Considerations

Home sellers will usually consider offers that have the highest contract price. However, when there are multiple offers with offer prices that are close (or the same) then sellers will look at the terms of the buyer's contract to decide who will win. If there are 3 offers that are only a few thousand dollars apart, then the tightest real estate contract will almost always win. Because of this, it's important to decide which competitive terms you're willing to offer in your contract.

NOTE!

Prior to submitting an offer to a listing agent, always call and ask:  "Are there any other offers that you are currently negotiating on?  OR are you expecting any offers to come in? OR, have there been any showings yesterday or today?


The reason for this is, if you become aware of multiple offers, it likely changes your strategy.  DO NOT submit an escalation addendum on an offer in which there are no other competing offers . You essentially tell the seller what you are willing to pay/ go up to in your negotiations.


Easy Wins for Any Real Estate Contract (Regardless of Multiple Offers)

  • Present a Pre-Approval Letter from a Reputable Local Lender:

    Not all national lenders are bad (and not all local lenders are great), but most experienced agents have had a bad experience with national/retail lenders at least once. By presenting a pre-approval letter from a reputable local lender, you're assuring the seller & agent that you have a "good" pre-approval since they know and trust this lender.


  • Consider Writing Tight and Standard Terms in Your Real Estate Contract:

    The timeline for response should be 8-24 hours or whatever the seller is asking for, earnest money should be 0.5-1%, inspection timeline should be 14 days after the accepted offer, the finance release should be 20-25 days after the accepted offer, and closing should be 30-45 days after the accepted offer.


  • Prioritize Contingencies
    • It's important to always represent your buyers, but situations often arrive in which buyers may ask "What do we have to do to get this house".  
    • OR I will ask: "If I call you in a few hours and let you know that you didn't get the house, will you be okay with it?"
    • Contingencies to think about:
      • Radon testing- this is one that I often let them know, even if the testing does come back 'high', you can mitigate the radon for ~$1,100.  This can make your offer look more attractive without breaking the bank!
      • Home sale contingency- can they get a bridge loan?
      • Pre-approval- is it from a local lender?
      • Closing date- what is best for the sellers?
      • Personal property- is there personal property that you're requesting that could be ommitted?

  • Waiver of Inspections
    • Buyer can choose to waive inspections, however, it's important they understand the risks associated with same
  • Partial Appraisal Waiver (CAUTION):
    • If financed: The buyer can waive the appraisal, however, that does not mean the financial institution will waive their appraisal.  Most financed offers will still require an appraisal.  In the event the appraisal comes back lower than the purchase price, the buyer will be required to make up the difference out of pocket
    • Cash offer- means that there will be no appraisal

It's important to understand that there is no "magic bullet" when presenting offers in multiple offer situations. Sellers will almost always defer to price before terms. However, your offer terms become extremely important when your offer is close to another buyer's.