You’ve found your dream home and are ready to send in an offer, only to learn that several other people share your dream — and are also submitting bids.
This can tend to set off a frenzy, in which buyers are all now in competition with each other. The best way to deal with a situation in which you are bidding on a home with multiple offers? Stay calm, handle the situation with grace, and come out on top with these five tips.
1. Be The Most Prepared
When multiple offers are submitted on a home, the seller won’t necessarily just pick the bidder with the highest price if there is no guarantee that they can actually purchase the house. That’s where a mortgage pre-approval can position you ahead of the pack. Being pre-approved for a mortgage shows the seller that you have the funds available for the purchase, and that neither of you will need to wait for you to initiate the lending process. Not to mention, you will have been able to do your due diligence to ensure you have found the best mortgage interest rates and loan terms for your situation.
2. Set Your Budget – And Stick With It
Of course, if all bidders are pre-approved, there is the likelihood that the highest offer will be selected by the seller. One way to stand out is to offer more than the list price. However, this can be a risky move if you aren’t well-versed in the local housing market and comparable sales. Work with your real estate agent to understand what homes are selling for in the area so that you can present an offer that is appropriate for all parties involved. Don’t ever submit a higher bid because you feel pressured to.
3. Waive Contingencies When Appropriate
One way to look more attractive to sellers is to waive certain contingencies, or clauses in the offer that the transaction is contingent on. In some cases, this contingency is waiting for a buyer’s home to sell before the transaction can go through — which means the deal isn’t always guaranteed. The fewer contingencies in your offer, the more secured the deal is in the eyes of the seller. However, be careful when waving contingencies like a home inspection — this can leave you with significant surprises that are only discovered after the closing.
4. Show Them The Money
Your pre-approval for a mortgage lets sellers know you can buy, and a deposit lets them know that you are serious about doing so. A good faith deposit, or earnest money deposit, is made when an offer is accepted, and part of your offer will be how much this deposit will be. If you pull out of an offer after the deposit has been made, the seller gets to keep it. Understandably, the higher the deposit, the more attractive the offer will be to sellers.
Let sellers know just how much you’ll love your new home — and your big plans for it.
5. Make It Personal
Sometimes it is the additional personal touch that makes a bidder more attractive to a seller. Help the seller feel confident that their home will be cared for and loved by telling them a little bit about yourself, and why their home is perfect in your eyes. Let them know as much about you, your finances, and professional life as you feel comfortable sharing (some of this will also be included on your mortgage pre-approval form) so that they see you as a person, not a piece of paper.
In a multiple offer situation, keep your calm and present yourself as completely as possible. Contact us today to find out more about loan options, mortgage interest rates, and pre-approval requirements.