Nine Tips for Negotiating a Home Purchase With Multiple Offers
Apr 19, 2022 brooklyn,brooklyn buyer,Brooklyn homebuyers,brooklyn real estate,brooklyn realty,first time homebuyers,realty collective
When the market is this hot, having a seller accept your offer on a home can feel like a daunting process. It requires a good agent and lots of patience — and a strong offer from the start. But as difficult as it can be, it’s not impossible. And we’re here to help you every step of the way.
Some things to know before we begin:
- Sellers want to get the highest price and best terms for their property.
- Buyers want the lowest price and most favorable terms.
- Listing brokers represent seller interests.
- Buyer representatives represent buyer interests.
- Real estate agents are subject to state regulations and the Code of Ethics, which requires the presentation of all offers quickly and objectively, sharing all information they receive, and being honest with all parties at all times.
- Multiple-offer situations always end in disappointment, as there can only be one sale. It’s the professionals’ jobs to ensure everyone feels they were treated fairly throughout the process.
For buyers who are just entering the market or for those who have lost out on one or several properties, here are nine tips to putting your best foot forward and successfully navigating a multiple-offer situation.
#1: Work With a Professional and Know the Market
Working with a real estate agent who is experienced and an expert in the market can be a crucial factor in determining whether you will be on the winning or losing end of a multiple offer situation.
Follow what’s happening in the market:
- Are homes selling over asking price?
- Are sellers underpricing to encourage multiple offers?
- What are similar properties selling for?
An experienced agent, who you trust, can help to determine appropriate value based on the current market trends and can assist in negotiations and advice throughout the process.
In some situations, sellers will have several competing purchase offers to consider. Sellers have several ways to deal with multiple offers. They can:
- Accept the “best” offer
- Inform potential purchasers that all offers are “on the table”
- Or “counter” an offer while waiting to see what else comes in.
While the listing broker can offer suggestions and advice, decisions about how offers will be presented —and dealt with— are made by the seller, not the listing broker.
#2: Know Your Negotiations
There are advantages and disadvantages to the various negotiating strategies you can employ in multiple offer negotiations. A low initial offer may result in buying the property you desire for less than the listed price — or it may result in another buyer’s higher offer being accepted. On the other hand, a full-price offer may result in paying more than the seller might have required. In some cases, there can be several full-price offers competing for the seller’s attention — and acceptance.
Your buyer-representative will explain the pros and cons of these (and possibly other) negotiating strategies. The decisions, however, are yours to make.
Purchase offers generally aren’t confidential. In some cases, sellers may make other buyers aware that your offer is in hand, or even disclose details about your offer to another buyer in hope of convincing them to make a “better” offer. In some cases, sellers will instruct their listing broker to disclose an offer to other buyers on their behalf.
You may want to disclose with your buyer-representative the possibility of making your offer confidential, or of establishing a confidentiality agreement between yourself and the seller prior to commencing negotiations.
Appreciate that your buyer representative’s advice is based on past experience and is no guarantee as to how any particular seller will act, or react, in a specific situation.
#3: Come in Strong Upfront
If you know or suspect that you’re entering a multiple-offer situation, you’ll want to come in strong from the very beginning.
Many agents suggest their sellers counter offer all of the offers in a multiple-offer situation, but that decision is ultimately up to the seller.
The most important thing you can show is that you’re serious about buying the property and that you have the ability to meet the terms and close the sale.
#4: Be Smart About Your Contingencies
Make sure your offer is clean, coherent, and complete. Missing pieces or confusing details may turn away sellers right away.
There are a bunch of contingencies to consider, many of which protect you. But waiving some, such as post-offer inspections, can be helpful under certain circumstances, depending on how serious you are. Sellers will most likely prefer less contingencies, but figure out your boundaries first. Putting more money down is typically a strong sign for sellers, too.
#5: Be Flexible With the Seller’s Needs:
Consider finding out what the seller wants first, and basing your offer around that.
- Do they want to close quickly?
- Do they need an extended closing date or lease-back?
Meeting these needs could get you the home, even if other offers come in higher than yours.
#6: Create a Personal Connection:
A personal letter truly can make an impact, especially if you’re buying a family-owned home. Take your time to write a thoughtful note about the details you love most and how well you’ll treat their former home as the years go on.
#7: Don’t Get Too Caught Up in the Bidding War:
Keep a level head and make sure you’re comfortable with all terms. You don’t want to get involved in a contract that will be difficult to fulfill. Remember, even though this is an emotional decision, it is still business.
#8: Get In Backup Position:
Even if you aren’t chosen, taking the backup spot can be a great way to land a home. If something goes wrong with the original offer, you’ll have the next chance to close.
#9: Stay Positive:
This process can be long and frustrating, so it’s important to keep your spirits high. It’s normal to lose out on a number of homes before one sticks, and it’s okay to take breaks when you feel overwhelmed. Remember that the professional who is guiding you will help you land your next home as soon as you can.
All in all, remember that buying a home right now is difficult but not impossible. With the right professional by your side, you have a much better chance of getting into the home of your dreams. Feel free to reach out at any time to get the process started — our experienced, Brooklyn-centered team is ready to get your offer accepted today.