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How to navigate a multiple offer situation -- and win!
Dated: October 19 2020
Picture this. You've been house hunting for weeks. Finally, you find the home and you're absolutely in love with it. You contact your agent, break out your checkbook, write an earnest money deposit, and sign the purchase contract. Maybe this home has even been sitting on the market for months -- so, you're sure that your offer will be the one. The next day, your real estate agent informs you that your dream home is now in a multiple offer situation.
Multiple offers are very common, especially in a hot real estate market like Nashville. How can you be sure that you win a multiple offer situation the next time you are house hunting?
Submit a large earnest money deposit
Sellers sometimes worry that once they commit to an offer, the winning buyers might back out of the transaction or default on the contract. By then, all the other buyers have disappeared leaving the seller back at square one.
Remember that the earnest money deposit is part of your down payment. By putting a large deposit down, you'll show the seller that you're financially strong & serious about closing.
Prove to the seller that you're qualified
Almost every offer will include a letter from a lender. Provide the sellers with a letter including your pre-approval from your lender. A pre-approval makes you appear like a much stronger buyer as opposed to a pre-qualification.
Pay for terms the seller would normally cover
If you're really set on that home, you can offer to cover some terms of the contract that the seller would normally pay. For example, you could pay for the title processing, home warranty, etc. Saving the seller money is a sure-fire way to get attention drawn to your offer.
Shorten or waive some contingencies
Especially if your sellers are eager to get out of their home, you can consider tightening the inspection time-frame. You will still want to get a home inspection, though. You might also consider waiving the loan approval contingency if your loan is solid. Your real estate agent can help you decide if you want to waive an appraisal contingency based on comparable home sales in the area.
Appeal to the sellers emotions
In addition to proving to your sellers that you are qualified to purchase their home, you can go an extra step further by writing a personal letter or recording a video of yourself or your family. Tell the seller exactly why you love their home so much, or, how your kids will play in the backyard. You will definitely get their attention this way.
Give the sellers time to move
If you don't need to move right in to your home (or even if you start moving in), give the seller the option to live in the home rent-free for a period of time while they are moving out or searching for a new home. This can take stress off of the seller, thus making your offer more appealing.
Offer over the asking price
With your agent's guidance, submit an offer for more than the list price. Sometimes, sellers price a home lower than market value to allow for a bidding war. If you offer closer to the market value to begin with, your offer may get accepted instead of others.
Include an Escalation Clause
Put simply, this lets a home buyer say: "I will pay X price for this home, but if the seller receives another offer that's higher than mine, I'm willing to increase my offer to Y price."
The days of seeing multiple offers in Nashville are far from over. Now, you're more equipped to snag that dream home with an irresistible offer! Of course, when you choose the right real estate agent, they will help you navigate this process & guide you to make the best decisions throughout your transaction.
Are you looking to purchase a new home soon? Let's get you in touch with one of our Experts.
Meet Holden. Holden is a licensed REALTOR® and serves as the Director of Marketing at Music City Experts. He’s the face behind social media, blog articles, website content, and graphic design for t....