How Can You Win a Multiple Offer Situation?

How can you win a multiple offer situation as a homebuyer? As a seller, what can you do to protect yourself in this situation?

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Sioux Falls is in a hot market right now, and multiple offer situations are coming up more and more often. As a homebuyer, what can you do to win the home you want? 

There are a few different strategies that you can use: 

1. Minimize your contingency amounts in the offer. Most of the time when you make an offer on a home, you will have a mortgage contingency and an inspection contingency. If you can minimize those contingencies, then your offer will stand out. 

2. If you’re comfortable with the home, buy it as-is. While this is a great idea, you have to be really careful and make sure that you’re really comfortable with the home. After all, when buying as-is, you end up skipping the inspection. 

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Be very cautious about buying a home as-is.

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3. Write a letter to the seller explaining why you want to buy the home. Tell them all of the things you love about the home—like how your family will enjoy living there and how excited your kids are about their new rooms. Sometimes sellers put in a lot of hard work and spend a lot of years in that home, so they want to make sure that they sell it to another family who will take care of the home and enjoy it as much as they did. 

4. Find out the best terms for the seller. For example, look at the closing date and figure out what time frame works best for them. Maybe the seller is building a home and doesn’t want to close for another three to four months, or maybe they need to close sooner. Those little terms really can be the deciding factor when it comes to choosing your offer over the other buyers. 

5. Include an escalation clause. When you write the offer, include that you are willing to go $500 higher than the next best offer up to a certain amount. You should also include that the seller has to prove the amount and show you the other offers; they can’t just make up a higher offer. This situation is interesting because you may see that the offer that wins isn’t always the offer with the best price—sometimes, the offer with the best terms wins.  

As a seller, multiple offers are the perfect scenario for you. You get to choose the best possible price and you can even get above asking price. 

However, since multiple offers drive up the sales price, sometimes the appraisal can come in low. As a seller, one thing you can do is include a clause stating that if the home does not appraise, the buyer will pay above and beyond the appraised value. 

If you have any other questions about how to handle multiple offers as a homebuyer or as a seller, just give us a call or send us an email. We would be happy to help you!