The title of this blog may seem strange in this time of most media pronouncing it a buyer's market with the implication that buyers should expect to get bargain prices on listings right now. I think many of us, however, are in markets where there are at least location or price range pockets that are experiencing much more of a seller's market - complete with multiple offers on listings.
Once you get over the shock of realizing that maybe on this particular house in this particular location, you will have to compete with other buyers if you really want it, the next question is "How do I increase my chances of "winning" a bidding war?" Here are some tips and ideas to consider:
Price is obviously important but it isn't always the only thing the seller cares about - and may not even be the most important one. In other words, highest price doesn't automatically equal winner. So what else matters? A wise seller will also value highly a buyer who clearly is able and willing to actually complete the purchase - a price even over asking price doesn't mean much if the sale never closes! Also important is as "clean" an offer as possible, while still protecting necessary contingencies for the buyer.
So what would that look like?
* Make sure you don't clutter the offer with extraneous requests such as asking for appliances or other items that the seller has not listed as being included. If they didn't list the refrigerator, they really may want to take it with them. If you want the living room a different color, plan on painting it yourself.
* If you are financing the purchase, include a solid preapproval (not just a prequalification) letter, preferably from a reputable, well known local lender and subject only to appraisal and title.
* Understand that if you are asking the seller to pay your closing costs, that impacts their net from the sale much like an offer which is that amount less on price (actually even a little worse since the seller costs will be based on the sales price, not the price minus closing costs being credited).
* Include a copy of your earnest money check and make sure it is for a reasonable amount (the expected amount will vary and your agent can tell you what may be expected - often 1% of purchase price). If you have a very small amount of earnest money, the seller may wonder if that means you don't really have the financial means to perform.
* Shorten up the timeline as much as is feasible on such contingencies as inspection or reviewing the preliminary title report - you likely should still expect to be able to include these contingencies but the shorter the period of uncertainty for the seller the better.
* Give the seller what they want if you can - that is, let them select title and escrow possibly, and even a closing date within a window of dates that would work for you. I have seen flexibility on closing dates be much more important to some sellers even than price!
* Ask your agent to ask the listing agent what else may be of high importance to the seller - and then meet it if you can.
* If you have any indication that the seller has lots of sentimental attachment to the house, consider writing them a personal note, commenting on the things about the home you particularly love etc. A seller who decides they "like" a buyer is much more likely to favor them if other things are pretty equal. Selling can have quite an emotional component just like buying can.
* Ask you agent if they think it might be helpful for them to present your offer in person (with the listing agent present and with agreement of the seller)
Rely on your agent's advice about any other specific things that could make your offer stand out in the crowd. And hopefully you have selected an agent who is an excellent negotiator! An agent who networks well, and is well respected by other agents can also give you just that little edge you need to buy the home you have fallen in love with!
