There is a lot of talk in the media about the Buyers Market so you think “Wow! I can get a great deal in purchasing a Western New York home!” You are dreaming of purchasing a $150,000 home for $75,000, have the sellers pay all of your closing costs, make all the repairs you want before closing and be grateful to do so.
That is not always the scenario WNY buyers are finding. In fact, many buyers are surprised that there are multiple offers on a Western New York home that they want. And with good reason too!
So why are there multiple offers on that $150,000 home?
Most likely the reason there are multiple offers on a home is because the home was priced correctly for the market conditions for that home and area of Western New York. Buyers have been sitting on the sidelines, they have done their homework and they know the market. They are ready to pounce on a home the minute they find it.
How to win when there are multiple offers
Real Estate is local and even today you may find yourself in a competitive market where houses sell quickly and still get multiple offers. Preparation is key to your success when entering into a multiple-offer situation. That means you need to have:
- An experienced Buyer’s agent working with you
- A solid understanding of the Real Estate Market
- Your Mortgage Pre-qualification set
- Have your Home Inspector selected
- Realistic dates, quick closing
- Have your attorney selected
- Be prepared to write a clean offer with little or no contingencies
- An offer that has a high net for the seller
How Does the Seller Decide Which Offer To Accept?
When the seller looks at several offers there are only so many points to compare. Your offer can be competitive if you know what you are doing. There are so many things you can do to make your offer the more desirable offer for the seller.
Review comparable sales information with your agent. Your agent will have experience in the market and be able to offer advice but ultimately you’re deciding on an offer price that is comfortable for you and reflects just how much you want the house.
Don’t assume that multiple bids means the offers will go sky high – sometimes all the offers can be under the asking price. The comparable sales info and the amount of activity for the listing should give you some sense of how the offers might go.
Type of Financing
Cash is gold! There is no worry about mortgage contingency. If there is a mortgage involved, a Conventional will be more desirable than a FHA or VA mortgage. Personally I have had deals fall apart because of FHA or VA financing requirements.
The typical contingencies in a home purchase contract are financing, home inspection, and satisfactory review of the condominium documents. You should have a letter of pre-approval from your lender at the ready. Be aware that some buyers may very well drop any and all of their contingencies.
Tighten up your timeline, instead of 7 days to do the home inspection, bring it down to 3 days. This is where having picked your Home Inspector before you find your home will help you. If you have a mortgage pre-approval your closing dates can be sooner than 60 days.
Expectations for deposit amounts vary in different states and regions. Talk to your agent about the norms in your area and consider increasing the deposit. This doesn’t cost you anything since the deposit will go towards your down payment. From the sellers’ perspective, however, it shows evidence of the seriousness of your offer.
Letter to Owner
And one no-cost but often very effective tool is a letter to the sellers. Write about who you are, why you love the house, and how you’ll take good care of it. Mention any special things that stood out to you. If you can tell the sellers took good care of the house say so. If you like their decorating mention that. Sellers will often remember and remark about the letter weeks after receiving it.
Many buyers avoid the multiple offer situations because it is too stressful. Finding the right house is a tough task, and if you are looking for a particular home in a specific neighborhood, you may have no choice but to compete for every home that you like.
A multiple bid situation is not impossible and not so scary if you know what to expect and how to position yourself in a winning situation. The key to your success is working with an experienced agent, craft your offer, and remember this is not the time to haggle if it is your dream home. Knowing that you are in a multiple-offer situation means that you should put your best offer first because you might not have the opportunity to negotiate with the seller.
Selection of Homes for your consideration: