How To Negotiate Multiple Offers
As a Realtor, working with both Buyers and Sellers in the rebounding Real Estate market can be challenging at times. Selling your home or buying a property can be one of the most important decisions and transactions in your life. As a licensed Real Estate Agent, I take my responsibilities very seriously by studying negotiation strategies that will put my Buyers or Sellers in the best possible situation to complete a transaction on a deal.
I have outlined 12 Simple Tips for handling multiple offers at once.
1. Contingencies Should Be Your Last Option
Do not automatically go to or consider a contingency. Only consider a contingency offer for the sale or lease of your property unless it is absolutely necessary. A financing contingency may be a prudent idea when you have another piece of property to sell.
2. Go In Strong!
When you find a home or piece of property that you really want, you have to be assertive and go in strong sometimes. If a property is receiving multiple offers, go in strong with your best offer! It is your objective to get that house and close on that transaction! Going in strong and to the point with your best offer, lets the person on the other end of the transaction know you are serious and if it is a strong enough offer, they will accept it. They too want to get this transaction to the closing table as quickly as possible!
3. Understand, There Will Likely Be A Counter-Offer
Be aware, that even going in with a strong offer on a property, if the seller’s agent is doing their due diligence, almost all offers will include a counter-offer. Knowing this ahead of time should save you any surprises and frustrations with a strong first offer.
4. Find Out Where the Seller Is and What They Really Want
Knowing the situation of the seller and what they are genuinely after in regards to an offer can save you and the seller a lot of time and head aches with offers and counter-offers. Sometimes this information is easily obtained, even through the seller’s agent.
5. Show Your Buyer’s Funds Credentials
If you want to make a solid impression with your offer, send in a verification of funds letter with a cash offer. If financing, send in a strong pre-approval letter or an underwriting approval letter which carries a good bit more weight than just a pre-approval letter.
6. Make a Strong Impression with Earnest Money
Let the seller know how serious you are about purchasing the property by putting down a considerable amount of earnest money along with an underwriting or pre-approved financing letter. By putting up $10,000 or more for earnest money where others are putting up $5,000 or less will certainly set you apart from the rest of the multiple offers being considered. All of that earnest money goes towards your down payment, so if you have the cash to put up, always put your best foot forward and set yourself apart from the rest.
7. Don’t Ask For Part of Your Closing Costs To Be Paid By the Seller
In a hot market with multiple offers, the sweeter you make it for the seller, the better chances your offer is going to be the one accepted. The seller is going to be looking at his bottom line just like you are. The more money in the sellers pocket at the end of the transaction, the better your chances are of getting your dream home! Do not ever let closing costs be the reason you lost your perfect home to another buyer!
8. Don’t Ask For Everything!
One of the surest ways of losing out on a contract with that perfect home you have been looking for is by getting greedy when it comes to the contract. Unnecessary things like personal property requests (flat screen televisions, refrigerators, washer and dryers and furniture in general) termite bonds, home warranties, etc…, will kill a contract before it even gets started. The more simple and attractive to the seller, the more likely your offer will be the one accepted over the other complicated offers.
9. Give the Sellers a Chance to Move
By allowing the seller a few extra days after the closing to pack up and move is a good way to show the seller you are going to be someone easy to work through the closing process. As anxious as you are to get into your new house, give the previous owners a little breathing room to move out. Little things like this can go a long way in weighing whose offer to chose and whose to put at the bottom of the pile.
10. Communicate Clearly and Quickly
There is a reason I saved this tip as the last. Probably one of the single most important tips anyone who is going into a home purchase can have. Communication is key is not just a cliche. Good, clear and prompt communication can save a transaction from disaster most times than not. If there is a counter offer, be clear and expedient to your reply. Again, this could be lone factor on whether or not your offer is pushed through or not. If the seller is waiting around for you to respond, he is going to quickly start to think of the other multiple offers being presented to them on a daily basis. Be smart and prompt!
No single transaction is identical to another. Each person involved in any kind of real estate deal has their own personalities and working with different types of people require different types of approaches. Being able to be flexible and compliant to the needs of the seller is key to making any real estate purchase a smooth one!