This guide covers buyers solutions to multiple offers on home purchase. There was a time where there were tons of inventory of homes on the market. Homebuyers can ask for multiple showings on the same property. They saw weeks ago and the home was still available. As the days turned into weeks and weeks turned into months, sellers were dropping the asking price of their homes. However, those days are long gone.
The team at Gustan Cho Associates are experts helping borrowers with credit issues or higher debt-to- income ratios get a home loan with bad credit. Sometimes it may take us weeks to get borrowers qualified.
Weeks may turn into months in helping home buyers qualified for a mortgage loan so they are solidly pre-approved. Once they get pre-approved, they get that long-awaited pre-approval letter they have long awaited for. Unfortunately, when they go shopping for their dream home, they encounter multiple offers. Many homes are selling over the list price and other homes are being bought by cash buyers or home buyers with no mortgage contingencies. In the following paragraphs, we will cover solutions to multiple offers on home purchase.
Pre-Plan Your Home Purchase
After buyers get a pre-approval, consult with several realtors, and choose a realtor they feel comfortable with. Buyers need a realtor they can get along with and have similar interests. Ask mortgage loan originator for a realtor to recommend. I deal with the best of the best realtors in the industry and the realtors I deal with are professionals who really care for their clients and are available 7 days a week. Pre-approved home buyers who need a realtor referral, please contact us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at gcho@gustancho.com.
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What To Do When Facing Multiple Offers on Home Purchase
When facing multiple offers on home purchase, buyers can employ various strategies to increase their chances of success. Here are some potential solutions. What happens when there is multiple offer on home purchase above asking price: If you’re financially able, offering more than the listed price can make your offer more attractive to sellers. Obtain a pre-approval letter from your lender to demonstrate that you’re a serious buyer with financing already in place. Offer a flexible closing timeline to accommodate the seller’s needs, whether they want to move quickly or need more time to find a new home.
Escalation Clause
When you include an escalation clause in your offer, which automatically increases your offer price if competing offers come in above yours up to a certain limit.
Flexibility on Repairs
Offer to take care of minor repairs or issues discovered during the inspection, relieving the seller of some responsibility and hassle. Be prepared to walk away: While making a strong offer is important, knowing your limits and walking away if the price exceeds what you’re comfortable paying is essential. The best approach will depend on the specific circumstances of the situation, including the local market conditions, the seller’s preferences, and your financial situation and priorities.
Real Estate Agent Role When There Are Multiple Offers on Home Purchase
Work with a skilled real estate agent. A knowledgeable and experienced realtor can provide valuable guidance and negotiation strategies to help you navigate multiple-offer situations effectively. A real estate agent may suggest a larger ernest money deposit when facing multiple offers on home purchase. Increase the amount of your earnest money deposit to show you are serious and have a solid commitment to the purchase. The real estate agent will interview buyers and ask the following questions
- Type of property
- Area and type of neighborhood settings
- Square footage
- Amenities
- Price range
- Lot size
- Age of home
Other qualities that appeal to home buyers is waiving contingencies: Consider waiving certain contingencies, such as the home inspection or appraisal contingency, to make your offer more appealing to sellers. However, be cautious with this approach and ensure you fully understand the risks involved. Consider writing a personalized letter addressed to the seller. Write a heartfelt letter to the sellers explaining why you love their home and why you’d be the perfect buyer. Sometimes, a personal connection can sway sellers in your favor. Working closely with your real estate agent and carefully considering your options will help you make the best decision for your home purchase. Click here to get multiple offers on Home Purchase
Role of Home Buyer’s Real Estate Agents
The real estate agent will then go to work for home buyers and research homes that are suitable on the checklist. The real estate agent will most likely email the listings and specs of the home. Buyers can go over the listings and pinpoint the homes they like to research further and visit. When buyers visit home to their liking, the realtor will tell buyers whether the home is fairly priced and advise. If there are potential other offers, the realtor will notify the seller’s agent. The Realtor will guide buyers on how to present a strong offer and try to have the winning bid.
Bidding on Property With Multiple Offers on Home Purchase
It is a seller’s market and homebuyers should expect multiple offers on the home purchase when shopping for a home. Sometimes there will be more than a dozen offers on one property in a seller’s market. Buyers encountering a home they like in a seller’s market, I strongly recommend to at least write an initial purchase offer on the property as close to the list price as possible if not the asking price.
What Makes Purchase Offer Different on Multiple Offers on Home Purchase
There are ways that the purchase offer will stick out more so than any other purchase offers. Sellers will not necessarily go with the highest offer unless the offer is a cash offer and an appraisal is not required. Most of the home buyers will need a mortgage. So no matter how much a seller wants for the property and no matter how much a home buyer is willing to pay if the home cannot appraise, the high price doesn’t matter. Property needs to appraise out unless the home buyer is willing to pay above the appraised value and has the cash to come up with the premium.
Large Earnest Money Deposit on Multiple Offers on Home Purchase
A substantial large earnest money will show strength. Earnest money is refundable. But if buyers can offer a $5,000 earnest money deposit versus a $500 earnest money deposit, it will mean a lot for the home seller. It shows the sellers that buyers are serious about closing on the home. It proves to them that buyers are serious about buying the home. Present the sellers through realtor a solid pre-approval from a mortgage lender and not just a pre-qualification.
Working With Sellers To Get The Winning Bid on Multiple Offers on Home Purchase
Also, tell the sellers that buyers are willing to work with them by giving them time to move. Buyers can also offer the home sellers a few days to move after closing without any compensation. Real estate regulations mandate that buyers have 10 days from the acceptance contract signed date for home inspections.
Buyers can decide to waive or eliminate contingencies such as repairs where it will take the property on an as-is a condition. If the appraiser comes back with minor repairs needed.
Buyers can offer the sellers that they will be responsible for the cost of the repairs as long as the sellers will grant access. Buyers who know that the home will have multiple offers on a home purchase, it might be wise to write the best possible offer or write the offer at asking price. Depending on how hot the property is, buyers may consult with the realtor and offer slightly higher than the asking price, depending on how bad they want the property.
Getting The Winning Bid on Multiple Offers on Home Purchase
Buyers who really want the winning bid for the property and have the means to come up with the difference in the event if the property does not appraise out, they can eliminate the appraisal contingency. Buyers can write on the contract that they will come up with the difference between the purchase price and the appraised value of the property does not appraise out. This contingency elimination is huge and may be the key to get the winning bid to purchase the subject property.
Solid Pre-Approval Fully Underwritten Signed Off By Mortgage Underwriters
All pre-approvals issued at Gustan Cho Associates Mortgage Group are full loan commitments that have been fully underwritten and signed off by our mortgage underwriters. Loan Officers are not allowed and permitted to issue pre-approval letters. Loan Officers can issue a pre-qualification letter but not pre-approvals. Loan officers should never sign off on a pre-approval letter. Home Buyers should never enter into a real estate purchase contract without a solid pre-approval letter signed off by a mortgage underwriter. This way, buyers, sellers, real estate agents will know that a solid pre-approval signed off by an underwriter that has been fully underwritten is like a cash deal. Buyers with solid pre-approval letters that have been underwritten and signed off by underwriters will get preference over other purchase offers.
