Eastside Real EstateFor BuyersFor SellersReal EstateReal Estate TipsUncategorized April 19, 2012

How Do You Compete With Multiple Offers?

Multiple offers for a home in the Seattle area?  Yes! You heard me correctly, there are multiple offers happening all over the eastside suburbs of Bellevue, Kirkland, Redmond and Sammamish.

The real estate market is going hot and heavy right now.  If you’ve followed my posts regarding the Seattle-Eastside real estate market, you’ll know that just about 50% of all the homes in the eastside communities of Bellevue, Redmond, and Kirkland sold last month.

It’s not unusual for 2, 3, or 4 offers to happen all at once when a good home comes on the market.  I even heard of one home in Bellevue with a drop dead gorgeous view that had 26 offers on it!  I happened to know who the winning buyer was and was able to ask how they were the chosen ones.  I will share that with you later in this post.

How do you get the house if your offer is one among many offers?  Other than selling your first born, there are some things you can do.

  • Write a very, clean, straightforward offer.
  • Don’t ask for any extras.
  • Don’t use unusual time frames.
  • Put down a good, solid amount of earnest money.  There’s no set amount, but show you are serious by putting down 2-3% of the offer price as your earnest money amount.  If you’re worried about this, then ask your Realtor to explain the ways you could lose your earnest money in a transaction and also how you can legally get it back because of the contingencies in an offer.
  • Include a copy of a pre-approval letter from your lender.
  • Find out the seller’s hot buttons.  Do they want the fridge, washer, dryer or would it be more convenient for them to leave these appliances?
  • Find out what works for the seller in terms of closing.  If the seller wants to stay a little longer, use a date that will work for the seller.    Allow the seller to stay in the house for free for a week after the closing to allow for an easy move.  Imagine the power of this for a seller.  (Banks will limit the time a seller can stay in the home after the sale is closed, so nothing beyond 30 days will work)
  • Use short timelines for contingencies.
  • Once you determine the time frames that work for the seller, use those and incorporate short dates for any contingencies.  Know how quickly your lender can close your loan for any home before you make an offer, so you can use the shortest date possible time frame for financing.
    The same thing should apply to the inspection time frame.  Shorten the time frame from the boiler plate time of 10 days to 5 or less.  You can easily  find an inspector in a short period of time which should make it possible to do an inspection in a matter of days.
  • Ask your Realtor to make a personal presentation to the seller.  It helps to humanize you as a buyer.  If your Realtor is able to do so, then wait outside in your car in case a quick response is needed.  You’ll be there to immediately sign any changes.  (this can only be done if the listing agent and seller allow your Realtor to make the presentation.  Many do not.)
  • Pre-inspect the home before you make the offer.   This may sound radical, but when the market was booming 5 years ago, buyers in Seattle routinely did this before writing an offer for a home.

You would need the seller’s permission to do this, but it might make the difference between winning or losing the home.  Usually an inspection happens within the first week-10 days after the sale and then negotiations for repairs begin.  If  you and the seller don’t agree on what will be repaired, you can back out of the sale. as long as you and your Realtor follow he time frames and guidelines of the contract.   Imagine the power of coming to the table with an offer in which there’s no inspection.  It’s no longer a concern for the seller.  It’s not a concern for you, because you’ve already done your inspection.  It gives you a lot of power as a buyer.  You’ve had the opportunity to determine whether the house is a well-built home…or not. In this scenario,  if the house has a lot of problems, you may not want to make the offer to start. By pre-inspecting a home,  you’ll know before you get involved in all the emotional ups and downs that accompany a multiple offer situation whether you truly want the home.  There is a chance you could do an inspection, make a great offer, and still not get the house.  But it may be better to lose the money on the inspection than lose a home you really want.

By the way, the buyers who got the house out of the 20+ offers paid a much higher price, had a great earnest money, pre-approval letter, great dates, and …pre-inspected the home!

There are other suggestions to  strengthen an offer?  What else can you suggest?