Navigating Multiple Offers: A Guide For Sellers And Buyers
Whether you’re a buyer or a seller, navigating multiple offers in real estate can be very tricky.
In this post, we’ll have a look at what sellers should look out for when choosing an offer. We’ll then have a look at the situation from the buyer’s perspective; and give you some tips and tricks on how you can put your best foot forward.
The Mechanics Of Multiple Offers
Multiple offers in real estate scenario is any situation where more than one buyer has made an offer on the same property within the same time-frame. These offers could come in simultaneously or trickle in over a period of days or weeks. In either case, however, all offers are shown to the seller, who will decide which one to accept.
Each transaction is different, so different variables will inevitably come into play. It really boils down to which offer seems most attractive to the seller.
The flipside, of course, is that the buyer can withdraw the offer at any time before the seller accepts. As a buyer, your real estate agent will typically also advise you to time the offer, so it’ll expire unless the seller accepts it within a given time frame.
Handling Multiple Offers As A Seller: 3 Quick Tips
While having multiple offers is a great problem to have, it also presents its particular set of challenges. Here are three tips to help you make an informed decision.
1. Consider the buyer’s financial situation
Serious buyers will include a mortgage pre-approval letter with their offer. This confirms the lender will grant a mortgage for the amount of the offer. Ideally, they’ll also include proof they have sufficient funds to cover the downpayment and closing costs.
Of course, you won’t need a pre-approval letter if the buyer is making an all cash offer. However, you should still ask for proof of funds. This gives you the comfort that the buyer can actually put their money where their mouth is before you set the process in motion.
A bank statement or a certified financial statement can both work as proof of funds. Whichever document you receive, however, make sure it includes at least the following information:
The account holder’s name. This should match the name on the offer.
The balance of funds. There should be enough to cover the full sale price as well as closing costs.
The date. The statement should be as recent as possible.
2. The less contingencies the offer has, the better
Contingencies are the circumstances in which a buyer can back out of the sale without legal repercussions.
Most buyers will include some contingencies with their offer. These may be fairly straightforward – a successful home inspection, for instance – or slightly more demanding, such as when the buyer needs to sell another property.
It goes without saying that the less contingencies the offer has, the better it is for you. Less contingencies mean less chances of the buyer backing out of the deal.
3. Is the timing right?
What closing time is the buyer offering?
There is no hard and fast rule here, as it really depends on your personal circumstances. If you’re all good and ready to move out and would like to get it over with as soon as possible, a shorter closing time will be the way to go.
If, on the other hand, you’re still not ready to move out, you’re better off with a buyer who wants a longer closing time.
Making An Offer In A Multiple Offer Scenario: 3 Quick Tips
Think you may be facing a multiple offer situation?
Don’t despair. Here’s what you can do to put your best foot forward.
1. Check with your real estate agent
A good real estate agent will usually check whether any offers have been made on a property, even before taking you for a viewing. Charlotte is currently a hot seller’s market. So, depending on the area, the price range and the home’s overall condition, there might be a good chance a property has already received offers.
It’s good to know the lay of the land before you view a property. However, just because there are other offers on the table, this doesn’t automatically mean you don’t stand a chance.
2. Make your offer as palatable as possible
It’s not unheard of for sellers to reject three or even four offers over asking and accept a lower bid. Why? Because the lower offer was an easier close.
There are several things you can do to give yourself an edge in a multiple offer scenario. Ideally, you should get pre-approved by your lender and send the seller a pre-approval letter and proof of funds. This shows you’re serious. You should also streamline your offer as much as possible. Try offering a short closing time (30 to 45 days) and include as few contingencies as possible.
If you do have to include a contingency (in particular, if you need to sell your existing home), be sure to organize all the documentation and to send everything over to the seller’s estate agent at one go. The smoother and easier you make things for the seller, the likelier they are to choose you.
3. Do your research
Of course, pricing is still going to be a factor in a multiple offer scenario, so you need to do your research.
Look at what comparable properties in the same area have sold for in the past three months; and base your offer accordingly. The trick here is to make an offer that’s competitive but also reflects fair market price. If it’s too low, and your offer might be overlooked. But if it’s too high, you could run into problems down the line, as the appraiser may not sign off.
The Bottom Line
Whether you’re a buyer or a seller, you should make it a point to be as honest and upfront as possible with your real estate agent. Your agent has your best interests at heart. The more they know about your motivations, needs and requirements, the more they can help you get the best deal possible (or boost your chances) in a multiple offer scenario.
Need help sealing the deal on a real estate transaction? Whether you’re a buyer or a seller, we can help. Talk to us today.
About the Author | Evan Selzer
Buyer & Listing Specialist Broker / Realtor® NC/SC
Evan’s background comes from 23 years in operations and sales in the field of pharmacy. The last position he held was as Executive Vice President of Operations for the largest long-term care pharmacy in the country with their corporate headquarters based in New York. With a strong track record in leading the industry, implementing innovative ideas, and staying ahead in a competitive market – Evan knows what it takes for a successful real estate transaction.
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