In today’s market, contrary to what you might think, multiple offer situations are on the rise. With a growing confidence that the housing market has hit rock bottom, home buying is on the increase, but many home buyers are finding that getting the home of their dreams is not as easy as it seems. Due to low inventory, multiple offer situations are more and more common.
CNN Money Magazine recently quoted a Sarasota, FL couples home buying experience:
“When Paul and Ieva Johnson moved from Minnesota to Florida, they were looking forward to warm weather and plenty of bargain-priced homes. But when the couple made their first offer earlier this year, they quickly discovered that they’d have to settle for the sunshine.”
“Not only didn’t they get the house, says Paul, but “we didn’t even get a callback.” Over the next two months they put in seven offers — most at or above asking price — before finally making a successful $365,000 bid on a Sarasota three-bedroom.”
Why is this? Because many potential sellers are still under water or feel the home prices are still too low. With lower inventories and more buyers, how can your offer stand out from the rest?
- Get more than just a pre-qualification. Take the next step and get a full credit approval through your bank.
- Waive or shorten contingencies. For example, tighten the period for a home inspection or if your loan is already approved, waive the loan approval contingency. Do not go in with a contingency of sale. The sellers will most likely gravitate to another offer.
- Don’t hope for negotiation. Offer your highest price. Some sellers list their homes under market value, hoping for multiple offers, so offering a higher price does not necessarily mean you are paying over market value.
- Play nice. Don’t expect the seller to pay your closing costs or ask for personal items. You can always take the extra step and offer the sellers two days to move out after closing, with no compensation contingencies.