Multiple Offers On A House – Winning The Bidding War
The summer home selling season is here and the real estate market in the Upstate is not showing any signs of slowing down. As home buyers you must be prepared to win the bidding war when you run into multiple offers on a house.
The first step is understanding what today’s sellers are looking for in a winning offer. Let’s face it, a lot of it has to do with the finances surrounding the offer, so it’s important that even before you even begin your home search that you speak with a mortgage professional and begin the process of applying for a mortgage. When I am representing a seller in multiple offers, the buyer must present documentation from a reputable lender of the buyers credit worthiness. I am looking for pre-qualification over pre-approval. Pre-qualification means the the mortgage lender has reviewed the buyers income, debt and assets and has confirmed monies available for down payment and closing costs. Pre-approval means the lender has simply pulled the credit report and nothing has been verified. In multiple offers on a house, being pre-qualified will put you in a much stronger position!
When making your offer you want to make it as clean possible. If the offer is filled with contingencies and seller concessions, you drastically decrease the chances of a successful negotiation. The biggest deal killer contingency is the sale of another home, especially if it is not even on the market. If you must sell your home before purchasing another, talk to a lender and look into obtaining a bridge loan so your offer does not include this contingency.
A clean offer will also minimum seller concessions. We see quite often buyers asking the seller to pay for part of the buyers closing costs. Quite often those seller paid closing costs can have a financial impact on the affordability of the home for the buyers. But if there are multiple offers on a house and one buyer is asking for $2000 in closing costs and the other asks for zero, and the both offered the same purchase price, the buyer with no closing costs will win.
So if you need those closing costs to buy the home, how can you compete? One tactic that I’ve used very successfully for my buyer clients is a Home Buyer Rebate Program. The program rebates part of the buyer agent’s commission back to buyer in the form of the credit at closing. So let’s say there are multiple offers on a $200,000 house. The buyer’s agent would rebate back around to $1500 to the buyers from the sale. This allows the buyer to forgo any seller paid closing costs and creates a much stronger offer. The buyer still gets closing cost help with the $1500 rebate.
In conclusion, you can win when there are multiple of offers on a house, you just have to be prepared!