Multiple Offers - What To do? / by Clark Hutt

Often my team and I have buyers in a situation where they love a home and soon find out that many other people do as well. This often hits in the under $400,000 price range, where a vast majority of buyers are. There are many things to consider when you have to navigate a situation like this. You now need to move from just making an offer to crafting one that grabs the attention of the seller and helps them see weaknesses in all the other offers. This is where a wealth of knowledge in your Realtor should come in to play! Here are a few of my suggestions;

1) Use a Realtor, Don't just call the listing agent - While it might seem that you can save a few dollars, or the listing agent might like it if you don't come with your own agent, it's not the best idea for you as a consumer. Unless you are dealing with Real Estate transactions on a daily basis, you are giving up a lot of knowledge and safety to the benefit of the seller and their agent. It won't cost you anymore as a buyer (in almost all cases), to use a Realtor to help you craft offers, and use the protections that Colorado contracts have in place for the buyer.

2)Be in the Mindset of a Seller - Turn around and think about yourself as the seller. What would you like to see from multiple offers, what would be important to you as the seller in this situation. People often get stuck in "they should just like us" mode, and hope that sellers just like them and it doesn't matter what goes into our offer. In multiple offer situations, sellers are bombarded with information so they just stick to the top important pieces that ultimately matter to their pocket books.

3) Money is king - Financial strength is a big thing for sellers and sellers agents to look for. How much money can you put down? What kind of loan are you getting (if any)? You want to put your best foot forward. If you can are only putting 7-10% down but you actually have the cash to put 15-20% down, you want to put that in the contract. You aren't tied to doing exactly what is in the contract, you just need to be able to prove that you are able to do that(meaning you can show your accounts with that money there). 

4) Show them you mean business - In Colorado buyers have all the power in the contract; you as a buyer can walk away pretty much anytime before closing without any penalty. So show them that you are in this for the long haul by taking away some of your privileges. That might mean only pointing out LARGE safety concerns in your inspection, and not being nit-picky about small cosmetic problems. That also might mean that you pay for any difference between the contract price and the appraisal (just means more money down). What worries can you take off of the seller so they just think that you'll finish the contract and move in no problem?

 

These are some generic points to think about when going into negotiations with a seller and their agent. I'll delve into all of these in much more detail in later posts as these are all tricky things to maneuver, and all change depending on the buyers situation and comfort level, and how much competition there is for this specific home. Good Luck out there!