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What To Do in a Multiple Offer Situation

What To Do in a Multiple Offer Situation

Denver’s reputation as a home seller’s market has been the norm for the last four years. While recent real estate prices have begun to cool off, a home that has been thoughtfully priced can still cause buyers to jump and create a multiple offer situation. This can especially be the case during the winter months when inventory is low and there are motivated buyers.

There are many ways to present yourself as a strong buyer. Below are some general tips on possible ways you can stand out as a determined, qualified, and personable buyer. When working with a Usaj Realty broker, they can assist you in determining the best ways you can stand out to a particular seller in a way that suits your timelines, best interest, and unique situation.

1. Be Efficient and Timely

Write your offer as soon as possible. Taking the time to find out if there are other serious shoppers is a wise use of your time. Your Usaj Realty agent will call the seller’s realtor and get a feel for the competition.

2. Make Your Earnest Money Deposit Count

Making a large earnest money deposit shows the seller that you are very serious about becoming the new owner. This is money you would pay about a month later when you make the down payment. Establishing this payment early on sends a message of sincerity and commitment, and communicates intentions that the seller will appreciate.

3. Get a Lender’s Pre-Approval Letter

Give the sellers a pre-qualified and a pre-approved letter. Pre-approval letters aren’t required but in a competitive marketplace, it helps to prove that your loan is solid. A pre-approval letter from a reputable lender verifies the buyers’ income, employment, assets, and credit score. This gives the seller a complete picture of who you are on paper and can convince them that you are more than qualified and will have no problem with the down payment and closing costs.

4. No Contingencies

A seller is going to prefer a buyer without a contingency of sale. Therefore, it’s advantageous if you can sell your house prior to making an offer. If your current home is in under contract, provide information about the timeline of the sale and the buyer of the property.

5. Be Personable and Make an Effort to Connect

Be understanding when it comes to the move out date of the seller. Find out when they plan to move into a new home and try to be flexible following the closing. This tactic can score huge points with the seller. Try to get an idea of their preferences (i.e. quick closing, long escrow period, rent back, etc.). Establishing a personal connection and treating them like a valued customer goes a long ways to seal the deal.

Furthermore, some agents recommend sending the seller a short but sincere letter explaining what is is about the property that you love. Describe why you deserve to be the home’s next family and what it will be like to live there. If you are on par with another buyer, this personal touch could help set you apart.

6. Write a Great Offer

If you and your realtor feel the home is likely to generate a lot of interest, there are multiple strategies you can employ to make your offer a strong one. Your Usaj Realty agent will run a comparative market analysis to determine the most appropriate tactics to take. You aren’t going to know what the other offers are so the more knowledgeable you are regarding your own budget, and details regarding local market conditions, the better equipped you’ll be to make an appropriate offer. Some tactics available to buyers are:

Pricing strategies that can make an offer stronger (but will cost you more money):

  • Adding in an escalation clause (your broker will help you understand this)
  • Bidding above the listing price

Inspection strategies that can make an offer stronger (in order of risk to you):

  • Not including an inspection requirement – this is the most risky option for a buyer
  • Including an inspection but taking the property “as is” no matter what the inspector finds
  • Including an inspection but waiving items on the report under a certain amount of money
  • Only inspecting the main components of the property

Timing strategies that can make an offer stronger:

  • Close on the home and offer to rent the home to the seller for a pre-determined amount of time, depending on their living situation post-sale (for example, they may need to find a new home to buy themselves)
  • If you are flexible on when you can move in, ask the seller what their preferred close date is and complying to that date
  • Close quickly if they prefer

Being flexible with the following:

  • You can waive certain deadlines depending on your situation (loan objection, title work, ILC, etc.)
  • You can allow the seller to leave any items in the home that they don’t want
  • You can increase the amount of earnest money you submit

Appraisal strategies that can make an offer stronger (but more expensive for you):

  • Including an appraisal gap (your Usaj broker will explain what this means for your particular situation)

Paying for seller expenses strategies that can make an offer stronger (but more expensive for you):

  • Offer to pay for HOA recording
  • Offer to pay for HOA transfer
  • Offer to pay for seller’s Title Policy
  • Offer to pay for OEC
  • Offer to pay closing costs
  • Offer to pay for moving costs

Negotiations and contingencies can be tricky, and Usaj Realty works individually, creatively, and professionally to make sure our clients are satisfied and walk away happy about the terms.  Contact us today if you are interested in learning more about buying or selling a home.

(Editor’s Note: This article was originally published in June 2015. It has been revised and updated to reflect the current trends in Denver real estate.)

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