No doubt you have a good eye for property and you’ve got your next move squarely within the crosshairs. How exciting! However, a development coming from the blind side is that you’re not the only one with their eyes on this property.
It seems there are several other parties, and they are serious because there are already multiple offers on the table. Apart from paying top dollar, what can you do to ensure you’re the victor in a bidding war?
In this article, we’re going to take you through what to do in a multiple offer situation, which is going to make the difference between success and failure. It may seem like the seller holds all the cards, but that’s not true if you keep these following points in mind.
You might think that people don’t really care who they sell their house to, as long as they get paid. That may be true to some extent, especially when you only have one offer on the table. However, the game changes when the seller is in control because of multiple offers on a house.
Even when all the offers meet their terms, they will still likely have a preference for one of the buyers. The key here is standing out from the crowd by creating a relationship with the seller. Writing a personal letter is an excellent way of doing that.
When you visit the house, try to pick up on what the seller is especially proud of about their home. Perhaps it is the garden that was a labor of love. In your letter, you should convey that you share their love in this matter and you will continue to keep it as they had envisioned it.
Launch an EMD
An EMD is not a weapon of mass destruction and doesn’t have anything to do with electromagnetism. It has everything to do with making an earnest money deposit. This is like a financial promise you will buy their house.
If you don’t keep that promise, you could lose your EMD. However, this strategy shows you’re serious about your offer and you have the intention to proceed to completion.
Multiple Offers: Cash Is Always King
Before Google, cash was always king and still is in the real estate industry. If you’re in a position to offer cash, then you have a massive advantage.
In itself, it doesn’t guarantee success because the seller still has to want to sell to you. So you need to keep the other points in mind, but it does give you the edge over your fellow contenders.
No Pain, No Chain
You may have made the highest offer, which is great. But if that offer is dependent on you finding a buyer first for your home, then the whole deal is a lot less attractive. Of course, it depends on the timeframe, motivations, and intentions of the seller.
However, as a general rule, if you’re not part of a chain of buyers and sellers, then that allows the sale to be closed more quickly and with greater certainty. If you’re part of a chain and that’s unavoidable, then you need to think about how attractive your final offer is in comparison to others.
Only Buy What Is on Sale
In a way, this point is linked to the first point about relationships. The seller will sell to you if you’re the only buyer, even if they don’t particularly like you. However, if there are multiple buyers, then the equation changes.
Don’t give the seller reason to be irritated with you by trying to buy items on the exclusion list. These items are their treasured possessions and they’re not for sale. Don’t try to negotiate for something that isn’t for sale and bruise your relationship with the seller.
Escalate and Wait
This is a good strategy for making a counteroffer that is not too excessive but always ahead of the other best offers. You can instruct your legal support that you will always increase your offer above the best offer by a certain amount.
This means that no matter what’s happening in your life, your offer will always be the highest on the table and by a pre-determined margin that you feel is acceptable.
Get a Pre-Approval Letter
If you don’t have the cash, or you’re a first-time buyer, then you can still succeed in a multiple offer environment. One way to do that is to make sure you have a pre-approval letter for your mortgage. This sends the seller the signal that you’re serious and you’ve got all your ducks in a row so that you can advance the closure of the deal.
Another important financial consideration is whether you use a mortgage broker to help you get the best mortgage deal, including the pre-approval above. Whatever you decide, you need to have your financial affairs in order and demonstrate that to the seller so they can trust you to complete the purchase.
Time for Champagne?
In this article, we have discussed some strategies and techniques you can employ when there are multiple offers on the property you want. You don’t have to be rich to get the winning bid. Follow these tips and you will be cracking open the bubbly soon.
Remember that someone’s home is a part of them and they want to feel they can entrust it to a worthy recipient. A more sensitive approach than just flashing the cash will go a long way when there are several potential buyers.
If you don’t have the cash, don’t be a victim of another buyer who does. We can help you succeed in getting the home you really want, so get in touch and let’s talk.