How to navigate a multiple offer situation

MULTIPLE OFFERS HOW TO NAVIGATE AS BOTH A BUYER AND A SELLER

NICK WOODARD – BENCHMARK REALTY

NICK@NICKWOODARD.COM

615.566.9839

If you have lived in the Nashville area for any amount of time in the last few years, it is no secret that we have found ourselves with a relative lack of inventory compared to the growing demand for housing. In this case what ultimately happens is that the best properties available can many times have more than one person that wants to buy them. This creates a “Multiple offer situation” where the seller of the property must select one party out of the group of offers to work with. So as a buyer, how do you make your offer stand out in the crowd? And if you are the seller, how do you choose the right buyer to work with? I want to share with you some tips and strategies that I use to help my clients succeed.

BUYERS:

Always make it clean. Don’t ask for anything crazy or make the seller’s have to do anything extra. When presenting your offer, ALWAYS provide a prequalification letter from your lender explaining that you have already applied for a loan and are qualified to purchase the home. Put down strong earnest money. I recommend nothing less than 1% of the price of the home. In my opinion THE MOST IMPORTANT thing that you can do as a buyer is to write the owners of the home a personal letter introducing yourself and telling them a little bit about the person that is wanting to purchase their home. Tell them about the things you love about the property and how you can see yourself caring for the property they called home for so long. Believe it or not, real estate is a HIGHLY emotional process. Even though large sums of money are involved in a real estate transaction, the highest bidder doesn’t always win the deal. If a buyer can find a way to relate to a seller and create an emotional connection instead of being just numbers and names on a piece of paper, they put themselves in a far better position than someone who doesn’t

You have been stalking Zillow, Realtor.com, and Realtracs for weeks. Your Realtor has been tirelessly searching and sending you homes to look at…none of them are really what you are looking for. Then it happens! Your dream home hits the market. You set up a showing on the first day and there are 8 other families lined up to see the house at the same time as you. You are concerned, but feel that if you just put in a full price offer, the house is yours. Well….not necessarily. Just like a job interview, you MUST make your offer stand out in the crowd, but how?

  1. Always make it clean. Don’t ask for anything crazy or make the seller’s have to do anything extra.
  2. When presenting your offer, ALWAYS provide a prequalification letter from your lender explaining that you have already applied for a loan and are qualified to purchase the home.
  3. Put down strong earnest money. I recommend nothing less than 1% of the price of the home.
  4. In my opinion THE MOST IMPORTANT thing that you can do as a buyer is to write the owners of the home a personal letter introducing yourself and telling them a little bit about the person that is wanting to purchase their home. Tell them about the things you love about the property and how you can see yourself caring for the property they called home for so long. Believe it or not, real estate is a HIGHLY emotional process. Even though large sums of money are involved in a real estate transaction, the highest bidder doesn’t always win the deal. If a buyer can find a way to relate to a seller and create an emotional connection instead of being just numbers and names on a piece of paper, they put themselves in a far better position than someone who doesn’t

SELLERS:

So for anyone that is selling their home and finds themselves in a situation where more than one offer has been presented, congratulations. But which one do you choose? I know what you are thinking…obviously the highest price offered! Well…not necessarily. There are multiple things that need to be considered. Has the potential buyer gotten approved from a qualified lender? Do they have a home to sell? What are their contingencies? Are they flexible with your ideal timing of closing and possession dates?

When receiving multiple offers on your home, TERMS are everything. Don’t just look at the highest priced offer and select that contract to work with. I’ll let you in on a little “trick” that some agents are using in order to get their client’s contract accepted.

Remember…if someone is getting a loan in order to purchase the home, the property must appraise for that contracted price if they have an appraisal contingency in the agreement. So, some people are putting out offers way above asking price in order to get their offer selected out of the group of offers. They then know that later down the line when the home is appraised, it will not appraise for the contracted price, thus the seller will potentially lower the agreed price to keep the deal together. Good strategy or shady business practice? I”ll let you decide. But remember, TERMS are everything.

* I would be honored to assist you in selling or purchasing a home in the Greater Nashville area. God Bless

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