Happy month of April! We hope you are enjoying Spring. The Orlando real estate market is still going strong. While rising rates could potentially slow the pace of home sales, rates remain relatively low by historical standards. Record-low inventory is continuing to put upward pressure on home prices and creates challenges for buyers. If you are still in the market to buy or sell a home, give us a call without delay! We will provide timely insights which you may find helpful.
Q: I have made offers on several homes without success. What will help me in a multiple-offer competing situation?
A: We can completely sympathize with your frustration. If you are currently looking to buy a home below $300,000, the competition can be fierce. If the home is well presented and priced properly, your chance of competing with other buyers in a multiple-offer bidding situation is very high. Although there is no magic bullet that can guarantee your offer is accepted, we can share with you the factors that sellers consider when they are choosing among multiple offers.
Basically, sellers are looking for the highest net price and the smoothest transaction, with the least amount of hassle and uncertainty. So keep these factors in mind when you structure your offer.
Price: This is the first item a seller looks at. Not just at the offer price, but the net price. If you ask the seller to pay for things such as your closing costs, a home warranty, repairs…etc, these will be deducted from the offer price and make your net price offer less competitive.
Financing: The seller is looking for assurance that a buyer will successfully obtain loan approval to complete the purchase. There is nothing more frustrating for a seller than to wait 30 days only to learn the buyer’s loan is denied. Because of this, cash is most preferred. A Conventional loan is next, with more down payment the better. Whatever your financing type or terms, be sure you have a strong pre-approval letter from a reputable lender. You want to show the seller you can get the loan and close on the house.
Escrow Deposit: This is also called good-faith money. This shows the seller how much you are willing to forfeit if you do not come to the closing table. An offer accompanied by a small deposit is considered not serious. You want to show the seller you are serious.
Closing Date: The seller is looking for a date that works the best for their situation. Your flexibility to accommodate the seller’s needs can work in your favor.
Contingencies: These are conditions under which a contract can be canceled. More contingencies you build into your offer, less certain the closing looks to the seller.
Concessions: Make your offer as “clean” as possible. Don’t ask for things that are not vital to you. Concessions can be items such as a washer and dryer, or requests such as “refinish the pool surface”. Between two similar offers, the seller often chooses the one that asks for less.
Offer Presentation: Be sure your offer is presented in the most professional and timely manner. We regularly receive offer packages that are incomplete or incorrect. Make sure your offer has a correctly filled-out contract, all required forms, as well as a valid pre-approval letter.
Finally, there is nothing more frustrating than to learn the seller has chosen another buyer, while you’re holding back your top offer for that home. Remember a seller is not obligated to respond to offers in the order they come in. In a multiple offer situation, you may not get a counter-offer or a chance to improve your offer. You may want to consider making your highest-and-best offer upfront to beat out the competition.
Of course, these are very general tips. Each of these can be an article on its own. They interact on multiple levels in a negotiation. Your agent truly matters. Having the right representation is crucial. We work hard for our buyers. We reach out to the other party and discuss how to structure a win for our clients.
Best of luck to you. Hope you will achieve contract and be in your dream home soon!