Wondering how to win in multiple offers? As we reach the mid-year point, the surge in home demand presents both challenges and opportunities for buyers. With many who skipped buying last year now entering the market, competition is fiercer than ever. Whether you’re a first-time buyer or seeking an upgrade, follow our 3 tips to win in multiple offers and secure your dream home in this competitive market.
There are three categories where you can buy a house.
- New Construction: You work closely with the builder’s representative, requiring less strategy in making the offer.
- Homes on the Market for Several Weeks: Homes that have been on the market for a week or more without other offers allow buyers to bid below the list price easily, as there’s little competition.
- Highly Competitive Listings: These are homes that immediately attract multiple offers due to their appeal, location, and pricing. In such scenarios, the challenge is to stand out among other interested buyers.
Now that you’re familiar with three categories of homes to purchase, here are the three important parts of the offer that matter if you’re going to win in a multiple offers situation:
1. Timing of the offer
Famous philosopher, Ricky Bobby, once said, ‘If you’re not first, you’re last.’ Well, in this case, I actually think in a multiple offer situation, if you are first, you might be last and I don’t love putting an offer in first.
Now, if that home pops up and you love it, it’s hitting everyone else’s search portal at the same time. So, I do recommend you contact your agent and get out there to see it as soon as possible. But I don’t necessarily think that you should put in the first offer. Why? Oftentimes, in a multiple offer situation, sellers will say, ‘Hey, we’re leaving offers open until this time and then we’re going to review and accept at this certain time.’ I don’t like being first because it gives the opportunity for other agents to come in, figure out where that offer is at, and leapfrog your offer, leaving you in the dust. So, I like being a little bit later in the process. But there is the risk that the seller could accept an offer early.
Here’s an example of what happened to us with a client this week who’s shopping from out of town. We did a virtual showing, we knew that the seller had an offer in hand. We indicated that we were going to offer as well and we asked, ‘Can we submit the offer tomorrow morning?’ Generally, a seller and a listing agent, they’re going to say yes because they want to review all the offers. In this scenario, the seller wanted to get it done that night. So, we kind of scrambled a little bit, we made sure that they didn’t accept the other offer, got them something in hand, and we ended up winning. The next morning, they accepted our offer. Sometimes they will accept fast, but typically a seller is going to want to see more offers so that they can get a higher price. This is why I prefer to come in a little later, so I can gauge where other offers are at and craft a proposal to help you win in a multiple offer situation.
In summary, in a competitive real estate market, being the first to offer isn’t always advantageous. You should time your bid strategically to gauge competing offers and craft a compelling proposal. Our recent client’s experience underscores the importance of timing: waiting to submit an offer allowed us to secure the home successfully. Finding this balance between prompt action and strategic timing is key to navigating and winning in today’s competitive real estate landscape.
2. Offer Price
A tool we use to help you win in multiple offers but also not overpay for the house is called an escalation clause or an escalation addendum. What does that mean? Basically, what that document says is you’re willing to beat any other offer up to your max bid price on the house, and you’ll beat them by, say, $2,000, but they have to have that other written offer in hand. That way, you’re not overshooting your offer price unnecessarily.
Let’s say the list price of the home is $350,000. You’re willing to go up to $375,000. What you might do is offer with a contract price of $350,000, willing to go up to $375,000, and you’ll beat any other offer by $3,000. Let’s say the seller has another offer for $360,000, and that’s their next highest. Your escalation clause would kick in to $363,000 because you were willing to beat it by $3,000, and you win the deal without having to go all the way up to $375,000.
3. Occupancy
When do you get possession of the home? Remember, sellers usually want the highest price, but they also want the best terms. In this market, what can help you win in multiple offers is offering flexibility with the closing terms, the seller gets a check, but they also get to live in the house for 15, 30, 45 days while they’re going to shop for a new house. If you can give that flexibility to the seller, that will help you win in multiple offers and situations.
BONUS TIP!
Write a cheesy love letter
Look, it doesn’t always work. Sellers aren’t always going to lean on emotion, but write that love letter. How you picture yourself in the home, how you picture your family in the home, what you love about it. Put the cheesiest picture of you and your family and your dog on the front. Sometimes it works, it doesn’t always work, but sometimes it works.
How to Win in Multiple Offers in Today’s Housing Market?
Navigating today’s competitive housing market demands strategy and expertise. Tips like timing your offer, using escalation clauses wisely, and offering flexible occupancy can give you an advantage and help you win in multiple offers. Having a knowledgeable real estate agent is crucial.
If you are looking to buy or sell a home in the Cincinnati or Northern Kentucky area, my team would love to be your real estate resource of choice. Contact us at info@teamsztanyo.com to secure your dream home or sell your property on the best terms possible!
We’re here to help make your real estate experience a success!