As the real estate market continues to boom, we are noting inventory has tightened across the board. This is a factor that has been on the national level for quite some time. Locally, we are seeing less inventory, and even seeing homes and properties on the higher end of the market sell.
In these scenarios, we oftentimes run into a situation where multiple offers may be placed on a home. This can make home buying a competitive situation, and we have a few tips if you find yourself in this scenario.
- Determine how much you want this property. Where does this home rank for you compared to others that were on your list? You may decide to bypass the multiple offers and negotiate on another property.
- Offer the highest value you’re comfortable making. If you decide to move forward with your first choice, then our advice is to offer the highest value that you are comfortable in making. In our experience the buyer who “wins” feels excited and happy, and the buyer who doesn’t get their offer accepted feels a loss. Oftentimes we hear buyers wish they had made a better offer, so again making your best offer first is important.
- Reduce the number of contingencies. As a buyer you may want to consider reducing the number of contingencies you have to make the offer more competitive. Sellers will oftentimes give greater consideration to the “easiest” offers to negotiate and conclude a sale. Our team can help discuss some of these options with you.
- Increase the earnest money. Some buyers increase the amount to show the seriousness of their offer.
- Provide a pre-approval letter from your lender. If it is not a cash transaction, a pre-approval letter will show your ability to purchase the home.
Typically, it is not just the value of the property that’s a consideration for the seller; rather, it is the quality of the offer. Most sellers will negotiate on the offer that has the most likelihood of going to closing, even if the value isn’t as high. In our experience, the quality is often more important than the quantity. From the seller’s perspective, an offer that matches their desired closing and possession dates may have as much value as price amount, as sellers may be anxious to make an offer on another property to move forward. Your Durango Team broker will assist in producing the tightest timelines that work for you and a potential seller.
On the seller’s side, you will typically benefit from seeing what the market will really produce for your home. If you are on the high side of the market, you may not get a full price offer, even when you have multiple offers. If you are at a fair market value, you will likely receive near full price, full price, or over full price offers.
We work with our clients to place the most competitive offers on the buyer’s side, as well as navigate the received offers on the selling side. As always, please let us know if we can assist with any questions or information.