If you’re a seller faced with a plethora of offers for your house, you rejoice. The more, the merrier! However, buyers competing with multiple offers for their dream house aren’t typically so cheery. If you want to win the race, you’ll need to learn how to handle multiple offers on a house.
How to Handle Multiple Offers on a House
When several buyers put in offers on a single house, the seller calls the shots. Sellers in this lucky position have a few options (source). They may simply accept the offer that they like best. Alternately, they may invite everyone (or just a select few of the would-be buyers) to sweeten the pot by making counteroffers.
As a buyer, your ability to influence the seller’s course of action is limited. However, that doesn’t mean that you are completely at the mercy of their whims. While you may not be able to guarantee your offer will be chosen, you can take steps to improve the odds that it will come out on top.
Make Your Best Offer First
If your offer is underwhelming, you may never get a second chance to make a winning impression. That’s why it’s vital that you make your first offer your best offer. As U.S. News & World Report notes, sellers don’t want to deal with the hassle of a deal falling through at the last minute. They want to feel confident that a buyer is serious about purchasing their property. Coming in with a strong, competitive bid from the very beginning makes it clear that you’re a serious buyer.
Keep It Clean
In a real estate contract, contingencies are requirements that must be met for the sale to proceed. If the contingencies aren’t met, then the buyer can walk away from the deal and take their earnest money with them.
Contingencies protect you (the buyer) by giving you an out, but they can make your offer less appealing to a savvy seller (source). The more contingencies a contract contains, the greater the risk that it won’t reach closing in a timely fashion. Smart buyers who are faced with the likelihood of multiple offers on a house will keep their offers clean by limiting, shortening, or eliminating contingencies. So buyers in tight markets need to weigh the value of common contingencies carefully before deciding whether to include them in their contract or leave them out to sweeten the deal:
- A home inspection contingency gives the buyer the right to have a home inspection completed and request repairs based on its findings.
- An appraisal contingency gives the buyer the right to negotiate or walk away if the home does not appraise for a specified amount.
- A title contingency gives the buyer a chance to review claims to the property and call a halt to the deal if problems are discovered.
- A financing contingency allows a buyer to escape the contract unscathed if their lender does not approve their mortgage.
Show Them the Money
When you’re hoping to make a purchase, money talks.
In addition to offering a competitive price, The Balance suggests offering a large earnest money deposit, which can help your offer catch the seller’s attention and conveys your seriousness without costing you anything extra. After all, the earnest money is part of your down payment, so putting more down at the beginning just means that you need to bring less to the table later.
Another persuasive move is offering to pay the difference in cash if there’s any concern that the property might not appraise for the total that you’re offering.
Are you planning to make a sizeable down payment? Mentioning that can also help your chances because it gives the impression that you’re better able to handle any financial surprises that might arise during the sale.
Cater to the Seller’s Convenience
Money isn’t the only thing that matters. Is the buyer in a hurry to close and move? Alternately, do they need more time to clear out of the home? Finding out what terms matter the most to a seller and using that knowledge to tailor your offer can make a huge impact, according to U.S. News & World Report.
When you’re shopping in a competitive market, you need a lender who understands how to handle multiple offers on a house, has connections with local professionals, and is ready to act decisively. PrimeLending of Kansas City is committed to delivering excellent service in a timely, transparent fashion. Contact us today to explore the possibilities.