Multiple Offer Situation Success for Buyers

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Real Estate

How to Have Success in Buying in a Multiple Offer Situation

Whether or not there are multiple offers, when negotiating with a Seller put yourself in their situation.  Think like the Seller would, and make it easy for the Seller to sell to you.

1.  Write the offer for the highest price you feel it is worth.  The price where, if someone else offers $5000 more (about $30/month), you can say "Good for them.  I didn't want it for that much." And remember, listing agents almost never give you a second chance.  They don't write counter offers, so you have to give it your best shot.  
2.  If another price is similar to your price, the terms will be just as important.
3.  The shorter the close of escrow the better in a Seller’s mind, even if they wish to rent back.
4.  If you have the ability to pay cash then do so.  You can always obtain a loan after closing if that’s what you desire.
5.  If you are unable to pay cash then the higher your down payment the better.
6.  A higher initial earnest money deposit (up to 3% of the purchase price) is more attractive.
7.  If a loan is involved, have your lender’s qualification letter current and ready to submit with your offer. Use a local lender and not an internet bank, as agents have more trust with lenders they have worked with.  Have your agent ask the lender to call the listing agent as well.  Be sure to have statements showing your down payment monies to submit with your offer.
8.  Make the loan contingency period as short as possible..
9.  If you are able, and willing to do so, waive the appraisal contingency.  The lender will still require an appraisal; waiving the contingency removes your ability to renegotiate the price based upon a less-than-offer appraisal.  The lender will lend only up to 20% of the appraised price, even if your offer is higher.  You will have to come up with the difference in cash..
10. Who pays which non-recurring closing costs are negotiable but closing costs are usually split by county customs. Think about paying some, or all, of the Seller’s non-recurring closing costs including your home warranty and any costs associated with pest inspection repairs.
11. Even when it is your choice consider using the title company preferred by the Seller.
12. Make your contingency period for inspections and due diligence as short as possible.  Also consider using any Seller provided inspection reports.
13. When the Seller makes reports and disclosures available prior to contract acceptance, read them, and ask all your questions about them. Then acknowledge them and submit the signed forms at the time of your offer. Consider waiving the review of disclosures along with your offer.
14. If the Seller has any wants, special needs or unusual circumstances, do your best to accommodate the seller and put it in writing with your offer.  
15. Write a letter about yourself and your family, and why you love this house enough to offer on it.  Make it unique to the house so they know it’s original.