When you are in such a strong seller’s market as we are today, you are faced with many more challenges than you are in a regular balanced market.
With such low inventory and so many more buyers than homes, the competition can get fierce, especially in the lower to mid-price points. We are seeing many more multiple offers, which is great when you are the seller but can be very frustrating when you are the buyer.
Multiple Offers — Buyers
If you are buying in the lower to mid-price point, make sure you have your running shoes on. As soon as a home is listed, chances are it will have multiple offers on the first day. You can’t sit back and wait to view homes on the weekend anymore and you need to have everything ready to go.
You should have discussed a game plan on making offers with your buyers’ agent, but this can change with each offer based on what is important to the seller and how many offers are on the table.
Just know going into buying a home in today’s market the days of coming in under the asking price or getting a deal are gone. Chances are you will be offering above the list price, and throwing in your first born and whatever else you have to give to try and be the offer that’s accepted.
Once you find your perfect home, the challenge now becomes how to write an offer that will be accepted over all other offers they have received. Your buyer’s agent may call the listing agent to ask for additional information, such as when all offers will be presented to the seller, if the seller is going to accept the highest and best offer or counter, and if there is anything in particular that the seller would like in an offer. A seller may prefer a quick close or a longer close, or being able to rent back for a week or two may be a huge benefit for the seller. The more information you have the better you can write your offer with terms you know will be attractive to the seller.
It’s not all about price and getting creative with other terms such as buying as is, or being able to waive the appraisal contingency, which can make your offer stand out and be a stronger offer to the seller than just a higher price.
There are many different negotiation strategies and your buyer’s agent will explain the pros and cons of them all. You will be given a lot of information and different ways to make an offer, but ultimately the decisions are yours to make.
Multiple Offers — Seller
There isn’t a better time to sell than in the kind of sellers’ market we are in right now. You know before you even list your home if it’s priced right it will sell quickly and may have multiple offers, but being in this seller’s market comes with its own set of challenges.
The first is to make sure you don’t over price your home. When home prices are increasing, and multiple offers are driving prices even higher, it can be tempting to shoot for the moon on the list price of your home. Sometimes this may pay off, but chances are if you are priced too high your home won’t get a lot of showings or multiple offers, and may not get any offers for weeks. This can lead to having to do a price reduction and your home sitting on the market.
In a balanced market, a home that has sat on the market for a month or two is expected but not in today’s sellers’ market. If buyers see a home that has been on the market for a while the first thought is why? They will assume there must be something wrong with the home or it’s overpriced. This could have buyers putting in lower offers or choosing not to view your home at all.
Who doesn’t love to hear that there are multiple offers on their home? You know you are in the driver’s seat and have all these buyers who want to buy your home, and are willing to negotiate on your terms, but it can also be rather daunting when it’s time to sit down and go through them all.
The best offer does not always mean the highest offer. It’s not just about the price, there are other things to consider, such as the type of loan, down payment, are they asking for any seller’s concessions or personal items, and what is the closing date — just to mention a few. There can be many different terms and conditions on each offer and analyzing each one carefully, and understanding what each one means to you, will determine which offer is the highest and best to accept.
There are different ways you can deal with multiple offers. You can accept the best offer right up front and be done, you can counter just one offer, counter more than one offer, or counter all the offers. You do not have to counter all the offers with the same terms.
You have to be careful when you start countering back and forth as some buyers may choose to back out rather than get caught in the middle, or feel they are being played too much and pull out. This is when you will be so grateful you chose an experienced agent to help you sell your home. Nothing can help you more at this stage of the game than having the knowledge and experience of a local agent to help you navigate the multiple offers and how to counter. Your agent will lay out the details of each offer or counter, and explain what all the different terms mean to you, so you can confidently make the decision which is the highest and best offer to accept.
If you are thinking of buying or selling your home, and would like more information on today’s market, and how to handle multiple offers, please feel free to contact me anytime at (602) 571-6799.
Lorraine is a Multi-Million Dollar producing agent, has been a full-time Realtor for over 12 years, is an Associate Broker of KOR Properties, a Certified Negotiation Specialist, and is on the Professional Standards Board. You can reach Lorraine at (602) 571-6799.