What to do in a Multiple Offer Situation
With low market inventory and an improving real estate market, buyers in Hampton Roads are finding multiple offer scenarios to be more and more common. Be prepared and ready for action in case you come across a multiple offer situation.
Challenges to buyers in a multiple offer scenario
- Offering over list price – Many buyers are still out looking for a “deal” and are fearful to present an offer above list price. As the local real estate market improves, so are housing prices. Utilize your agent’s comparative market analysis and knowledge to settle on a price you’re comfortable with.
- Financing terms – In some cases, VA buyers are at a disadvantage when in a multiple offer situation. Sellers are more likely to lean towards conventional loans where the buyers have a down payment (some ‘skin’ in the game) and appraisal guidelines aren’t as stringent.
- Home sale contingency – When buyers have a home to sell prior to purchasing a new home, a home sale contingency can be used. This is a less favorable option to sellers because of the uncertainty of when and if they will get closed.
- Home inspection contingency – Although widely used and a good common practice, this contingency offers the buyers yet another opportunity to walk away from the contract, free and clear. For a competitive edge, waiving your home inspection right may just be the advantage to sway a seller in your direction.
- Closing date – In some cases, sellers are looking for a specific closing date to fit their moving schedule that may not correlate with the buyers’ schedule.
- Closing costs – Similar to a home inspection, it is customary for the seller to pay part of the buyers’ closing costs. This can be negotiated so that the seller pays a smaller portion or none at all.
How to overcome multiple offer challenges
Bring your best offer upfront. With your agent’s market analysis for reference, don’t be bashful if that offer is above list price.- Don’t wait to write an offer when you find the “one”…that house may available today but gone tomorrow.
- Escalation addendum – Automatically increases your offer “x” dollars over another, higher offer price (up to a set cap). Ask your agent if an escalation addendum is right for you.
Hampton Roads Real-e-statement is written by Alyssa Godwin, a Realtor with Liz Moore and Associates. For questions regarding buying or selling contact Alyssa at 757-329-6161 or alyssagodwin@lizmoore.com. You can also find Alyssa on Facebook or on the web at www.lizmoore.com/alyssagodwin.