How to Win Multi-Offer Situations: Simplicity is Key!
As I wrap up my series on how to win multi-offer situations, let's recap some of the topics I've covered in this column over the last year. Although getting your offer accepted these days seems like it takes an act of God and a ridiculous amount of money, it does not. It is a combination of subtle negotiation tactics meant to find the perfect solution of simplicity for the seller. Figuring out what they need and what will make their lives easier will help your offer rise to the top.
Buyers: Keep Your Offers SIMPLE.
Don't fill your offer with lots of contingencies and demands. Go in with the cleanest, simplest, and highest offer you are comfortable proposing.
Offer at least $20,000 over asking. This is the current average over the listing price. If you're not offering it, someone else is, and probably more.
Include an Escalation Clause. This allows you to beat any competing offer by a pre-determined amount up to a certain cap.
Use a Home Equity Line of Credit for a large down payment or to buy in cash. Borrow against your current home's equity to create liquidity to use to make your offer more appealing.
Do the home inspection for informational purposes only. You will need to make any needed repairs on your own after closing, but this gives you the ability to cancel the offer if anything is unsatisfactory rather than waiving it completely and being locked in unless your financing falls through.
Offer to cover part of an appraisal gap, if any. The home has to appraise at the purchase price for a mortgage. Offer to cover some of the difference in cash if it appraises lower than the purchase price.
Don't include a home sale contingency. Need to sell your current house? Get it under contract before looking, or get it prepped and ready to go live within 24 hours.
Offer a Seller Rent-Back. Only applicable if the seller needs to find a new home, but it could make all of the difference and take the pressure off the seller, thus getting your offer to rise above others in their consideration.
The highest offer is not always the best offer. It is a combination of terms and strategy that provides the least risk to the seller that often wins the day.