The market here is heating up, and more and more buyers are saying…”I cannot believe that I missed out on another one!”. A property will be for sale for 30 days and all of a sudden two or more buyers want to buy at the same time. This is scenario repeats itself every day, many times a day, in Southern California and now it’s happening in Phoenix, Scottsdale and even Tucson.
What is the best way to secure the property you want when you are competing with multiple offers?
Here are Five tips to help you win the bid and prevent someone else from moving into the home that is supposed to be yours!
Be Prepared. If you are just looking, feel free to look around. After all, I always say that buying a home is not like buying shoes and you should make sure that you know what you are getting into. Having said that, “To thine own self be True” and make sure that if you know that you “might’ buy if you see the “Right One”, then by all means don’t let the right one slip through your fingers if you are not ready. Have your financing ducks lined up whether that’s proof of funds or a letter of pre-qualification from a lender that sets forth the fact that your credit and funds have been vetted. Make sure that it is current and that you have copies in hand. All things being equal cash will win out, so if you can pay cash, consider doing that. You can always get a mortgage later.
Be Bold. If you like the home, and your gut tells you that the price is in the ballpark, make a good offer! Chicago real estate expert and agent trainer, Terry Watson says “If you sleep on it, you might not get to sleep in it!” If you are getting a loan, you cannot overpay because the lender won’t allow it. You see, they typically have more money invested in the home than you do and more at stake. The Appraisal will set the upper limits of the loan based on the value established and the percentage to be borrowed. If the appraisal comes in low, you can get out of the deal. Similarly, if you don’t like the results of the inspection, you have 10 days from the date of contract under the standard Arizona Association of Realtors purchase contract to pull out of the deal or negotiate repairs. Certain items may be warranted and the seller would be obligated to fix them. Consult your Realtor for details.
Use an Escalation Clause. If you know or suspect multiple bids, offer “$1,000 above the highest offer minus closing cost allowance, not to exceed $$$.” If you are getting a loan, you cannot overpay because there will be an appraisal and the lender won’t lend above the percentage of value set forth in the pre-qualification. See #2 above.
Get into the Seller’s Head. It’s not always about the money. Of course the money is almost always very important, but all other things being equal, don’t underestimate the power of giving the seller their preferred moving date or some other concession. That may involve allowing them to stay on for a bit after closing. Be cautious of lender requirements here, but a little extra time may mean more to them than a few extra thousand dollars. What else might be important? Ask them and find out if you can.
Hire a Good Agent. Ask your agent what experience they have had with multiple offers and find out what their success rate is. Be realistic, It is not always their fault if they don’t win at multiple offers. An FHA buyer with the minimum down who needs closing cost assistance, is not going to win out over an AS IS cash bid with a 2 week closing. Just make sure that your agent is quick and advocating on your behalf.
Lisa Larkin, Esq. is co-owner of the Tucson office of RE/MAX Select and leader of the Larkin-Ekrut Team.