Right now, you are most likely in a multiple offer situation, and to ease the chaos if you are the buyer, here’s some advice. The market in DFW is red hot, this is to be expected and you need to know how to play the game! It is not unusual for a seller to receive 20 to possibly 40 offers when there’s very little inventory on the market – and that’s the case right now! Here are a few tips for buyers in a multiple offer situation from us at GoalLine Real Estate with insights from Mindy Short, my buyer’s specialist.
If the home is a good fit, it’s a good idea to write an offer anyway. After all, yours could be the winning offer. You’ll need to keep a few things in mind to write a competitive offer though.
Submit a Large Earnest Money Deposit
Pending home sales sometimes blow up, and many sellers 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 will have disappeared.
Remember that the earnest money deposit is part of your down payment. You will show the seller that you’re really serious about closing if you increase it above normal. You’re only offering the seller the money now rather than later, and it speaks volumes.
If you’re not sure how much to put down as an earnest money deposit, ask. Normally it’s 1% but you might want to consider more, our buyer specialist, Mindy Short, will work with you on this.
Show the Seller That You’re Qualified
Every offer will be accompanied by a lender letter, unless you are paying in cash. Ask your mortgage lender for a loan preapproval letter and make sure you stand out from the rest. This is different from a pre-qualification letter. Being preapproved makes you a stronger buyer in the seller’s eyes.
Give the Sellers Time to Move
Buyer possession is often a sticking point. It’s hard enough to juggle multiple closings when you’re selling and buying simultaneously, and it’s even more difficult when the seller is doing the same. Offer to cut them some slack by giving them two to three days or more to move out after closing without expecting compensation.
Shorten or Waive Some Contingencies
You will want to get a home inspection but consider tightening that time period. Higher option money and fewer days speak volumes to the seller.
You might also want to waive the loan approval contingency if your loan is solid. Talk to us about comparable sales to decide if you want to waive an appraisal contingency.
Offer to Bridge the Gap Between Appraisal and Sales Price
If you think the home might appraise at a lower price than you’re offering, offer to pay the difference in cash. This would relieve a lot of stress on the seller. Or you can offer to take the home without an appraisal -this is happening often in the current market now. Your lender will walk us through that and what is best in each situation.
Write Your Best Offer
Don’t hope for negotiation in a seller’s market. Offer your highest price and make it one you can live with if your offer should be rejected. Make the offer attractive and consider going above list price.
Ask Mindy for comparative market analysis reports to determine the pricing range. Sometimes sellers deliberately set a price below comparable sales to generate multiple offers. Paying a little extra doesn’t necessarily mean you’re paying over market value.
I hope this helps the buyers out there and these tips do the trick in a multiple offer situation!
GoalLine Real Estate’s buyer’s specialist, Mindy Short can
help you through the process!
214-674-8004 or mindyshort@kw.com