Multiple Offers On Home You Are Interested In
Choosing the right house can be time consuming. There are many qualified home buyers who need to choose the right property in the right neighborhood within a certain price range. Sometimes it takes weeks while other times it may take months. Eventually, home buyers pick the home of their dreams. However, there are cases when you find the perfect home for you and your family and there are multiple offers on the same house. Cases like this happen all the time and many times people’s emotions run high and many start bidding up their offer so they can get the winning bid. However, paying a premium for a home with multiple offers may be a big mistake and ultimately can crash the deal if the property does not appraise out. Multiple offers are common when it is a seller’s market and there are not too many inventory or if a property is undervalued.
Multiple Offers: What You Can Do To Be On Top Of The Game
Sellers are represented by professional realtors and they will be advised that there is a limit on what the house will or can sell for so an uncapped bidding war is not normally the case on multiple offers. However, the seller will most likely accept an offer from the most qualified home buyer. Here are some tips if you are in a situation where there are multiple offers on a subject property.
- Offer a large earnest money deposit: A large earnest money deposit suggests strength. Earnest money is actually your money and can be refunded if you decide that you don’t want the house as long as within a certain contingency period. A large earnest money deposit will definitely put you ahead over others on multiple offers.
- Present to the sellers that you are a solid home buyer: Everyone with an offer will be armed with a pre-approval letter from a mortgage lender. Have your mortgage lender to also write a cover letter along with the pre-approval letter and be armed with an automated underwriting system DU/LP approval as well.
- Offer the sellers a fast closing or a delayed closing: You can offer a two week closing to the sellers or if they need time, offer the sellers that you will be working with them. Sell yourself through the real estate agents. Waive or shorten the contingencies. If your mortgage lender assures that your loan approval is solid, then you can waive the mortgage contingency. For example, you can get the home inspection period within 5 days of signing the contract. Other offers you can put on the table, depending on how bad you want the property, is taking the property as is where you waive home inspection.
Overvalue Of Property
Be prepared that if you go into a bidding war with multiple offers, the subject property might not appraise out. If this is the case, you need to come up with the difference between the appraised value and the actual sales price as additional down payment. If you offer this to the sellers, the seller might take your bid over the multiple offers.
By Gustan Cho