How to Win When There are Multiple Offers on a Home

When it’s finally time to buy a home that’s everything you want and more, it can be one of the biggest thrills ever–until you find out you’re not the only buyer with their eye (and wallet) on it. If you’re a homebuyer, this situation probably isn’t anything new, and while multiple-offer bids can be great for sellers, it’s not quite ideal for buyers.

But don’t worry, with some planning and insight into what sellers really want, your chances are better at being the winning bidder. Here, we’ll cover some helpful tips to give you the edge you need when facing multiple offers on a home:

Multiple-Offer Situations 101

Your goal is to come out on top of a multiple-offer pileup, but it’s important to understand what initiates them in the first place. Basically, when the current inventory is low, demand exceeds supply, interest rates are fair, and the home in question is in a great location in solid condition, then multiple offers are almost guaranteed to come flooding in.

The National Association of Realtors (NAR) reports there’s around 2.8 offers for every home listed, indicating a relatively competitive market. But if the current environment is one of a multiple-offer frenzy, how do you submit an offer that will put you ahead of the pack? The answer? With help from a professional.

Hire an Experienced Realtor

To really compete in a hot housing marketplace, working with an experienced real estate agent in your area will not only vastly improve your chances at locking in on the winning offer, but you’ll have a knowledgeable guide that knows the ins and outs of talking to listing agents, understanding seller preferences, and can advise you on how to make your offer stand out.

Losing out on a home can be frustrating, but the right real estate agent can make all the difference between an offer’s acceptance or rejection.

Get Pre-Approved, Not Just Prequalified

Not many buyers know the difference between pre-approval and prequalification. Pre-approval is the more desirable option when it comes to negotiating on a home. Pre-approval requires a lender pulling a full credit report as well as collecting pay stubs and bank statements. It also confirms employment status and is considered as good as a mortgage commitment. 

Pre-approval is a more secure option for sellers. Prequalification means that the lender will just look at the buyer’s overall financial picture based upon what the buyer has informed them. The buyer receives a prequalification letter, but the information has not really been verified. When you are dealing with multiple offers, pre-approval will give you an advantage over the competition to ultimately win an offer.

Understand the Sellers

The most overlooked part of the offer process is the seller’s plans. In a multiple offer situation, it can be to the buyer’s advantage to have their real estate agent communicate with the seller’s agent and find out what the plan is. Afterwards, the buyer’s offer can be realigned to match what the seller’s plan is to give them an advantage over the other offers.

Reduce Your Contingencies Where You Can

Contingencies, things like appraisals, inspections, and selling your current home, are typical aspects of most home sales, but in the multiple-offer arena, too many contingencies can be the kiss of death and weaken your position. Try to reduce or minimize your contingencies, at least in the seller’s eyes, so that the transaction will be faster and smoother–something everyone ideally wants.

Make a Bold Offer

Waiting too long or lowballing your offer in a seller’s market is a surefire way to lose out on the home you’ve been dreaming of. Instead, go bold on your offer and consider asking above the listed price, maybe even including an escalation clause to outbid competitive offers as well as a larger deposit to show that you’re a serious contender. Stay within your budget for sure, but don’t hold back on offering a killer bid, either.

Make a Winning Offer With the Right Realtor

Multiple-offer situations can be intimidating, but if you take time to prepare and understand the game, you’ll better your chances at making a winning offer and have the keys in your hands before you know it. But you don’t have to try contending with all the stress alone, talk to Realtor Linda Moore to assist you in getting the home you’ve always wanted.