According to a new report by Realror.com the Dallas - Fort Worth area has the hottest housing market in the country right now.
With home inventory levels being significantly low coupled with the interest rates being historically low, newly listed homes are being sold within a few days or even hours of being listed! These newly listed homes are often receiving multiple purchase offers, which is excellent news for sellers.
Having multiple offers, on the other hand, is not excellent news for buyers. It is paramount for a buyer that is getting involved in a multiple offer situation, that they have a great real estate agent representing them that has experience with multiple offer situations. Losing out on a house can be heartbreaking and frustrating for a buyer, so make sure when hiring the “right” agent to work with, find out what they do to help their clients win in multiple offer situations!
Get Pre-Approved, Not Pre-Qualified
Then get a bank’s pre-approval. It will show sellers that a lender has verified your income and credit score and determined you can afford payments on a mortgage for a certain amount.
Have all your paperwork in order – When submitting your offer, be prepared to show your proof of funds and where your cash is coming from, along with that all important pre-approval letter.
Have Fewer Contingencies
Keep contingencies reasonable and short. Offset a financing contingency with pre-approval and a strong earnest money deposit. Include a home inspection contingency, but tell sellers you will get it done within 7 – 10 days at the most. That way, if the price tag on those repairs gets out of hand, you can back out of the deal but not tie up the property for too long.
Understanding what the sellers plans are is important in a multiple offer situation. A great real estate agent should first find out either from the seller directly or from the sellers real estate agent, what the sellers plan is. Selling a home can be a whirlwind. Any flexibility a buyer can offer a seller has the potential to reward them. Being lenient on closing or possession dates might make an offer more palatable to a seller in the midst of one of life’s most stressful times; moving.
Make a Large Deposit
A buyer who is buying a home must provide with an accepted purchase offer a deposit, known as an earnest money deposit or good faith deposit. The amount of the deposit is variable. In a multiple offer situation, the larger the deposit can indicate to a seller the serious intent of the buyer to purchase their home.
Make a Large Down Payment
Investors have been snapping up homes to flip or rent, and they usually come to the table with cash. Sellers love all-cash offers because they’re less likely to fall through before the sale closes. Bring as much cash to the table as makes sense for your personal financial situation. A larger down payment also can help things move along quicker at the buyers lender and increase the likelihood of a mortgage commitment being issued.
Be prepared to pay the list price... or more
If you’re looking for a home in a sought-after neighborhood, be aware that a winning offer will likely be at or above asking price. This knowledge will help you construct a competitive offer at the outset that is still within your comfort zone. If a buyer is in love with a home and there are multiple offers, the buyer needs to know, they will have one chance and one chance only at getting that home. You may only have one shot to get it right, so make your best offer!
This is a newer, yet old technique, with which you agree to increase your offer if there’s a higher bid from another buyer. Thus you can write into the contract that you will offer $1,000 or $5,000 more than the highest offer submitted. Caution: Make sure you have a cap on that total amount – or you could be in for sticker shock.
Though it isn't standard practice in every market, personal notes from potential buyers can humanize a transaction and tip the scales in your favor. I’ve seen several instances where offers were accepted based on the letter, even though they weren’t the highest. This works particularly well if the sellers are attached to their home, but not always so well for estates, where family members may have competing priorities and be less emotionally attached to the home.
Trust your Realtor to help you beat out the competition and remember to appeal to the home seller's emotional side, especially if they have lived in the house a long time. It can't hurt to try!