Multiple Bids? Compete To Win Your Home Purchase
The spring market is here, what does that mean? If it’s anything like past years we have more buyers then homes available. This typically lasts from February to about May. However, there is a caveat, this usually only applies to homes under $300,000 and can get even more competitive for homes under $200,000. The reason, new construction. There is very little new construction available under $200,000 providing less competition and lower supply. As the price increases, new construction becomes another option which increases the supply.
For those buying under $300,000, it’s good to have a strategy or plan in place because you may run into multiple bids. If you are just throwing in offers with no plan then this market can get very frustrating. Emotions can run high and sometimes logic is thrown out the window. With a plan in place, you at least have a solid footing to hopefully keep you grounded when multiple offer bids do happen.
Below are some strategies buyers have chosen to include in their offer to purchase to maximize their chances of getting their offer accepted by the seller.
1. Write your offer over the list price.
2. Include an escalation clause to increase the offer for a certain amount above the highest offer received by the seller.
3. If the property appraises for less than the sales price, agree to pay any additional money down required by the lender.
4. Agree to pay all closing costs and transfer taxes/fees for the seller.
5. Strikeout the financing contingency.
6. Include documentation of your loan approval and financial ability to purchase with the offer.
7. Don’t make the offer subject to contingencies.
a. Buy the property “as is” with no home inspection, or
b. Buy the property “as is” with the right to do a home inspection.
8. Offer as large an earnest money deposit as possible. Some buyers have even offered the full price of the property as an earnest money deposit.
9. Make your earnest money non-refundable except for failure on the part of the seller to perform.
10. Allow the seller to set the closing date that is most convenient for them.
11. Do a home inspection and you agree to waive the first $X amount of repairs.
12. If the seller needs to occupy for a few days or weeks after closing, let them do so without charging rent.
13. Write a letter to the seller on why you want the home.
Sometimes depending on your financing, this will always be an uphill battle and might work better to choose and wait until the market softens and not as competitive. You need to find the right real estate agent that can best guide you depending your unique needs.
The items above are strategies some buyers have chosen to make their offers different. It’s your right to include or exclude any of the above items in your offer to purchase. Each of the above strategies may carry with it their own risks. Be sure you fully understand the risks involved before including any of the above items in your offer to purchase.
Twin Advisers are NOT recommending any of the above, but rather informing you of different ways you may choose to structure an offer to purchase.