How to Win In a Multiple Offer Situation When BUYING A GEORGIA HOME
If you are thinking about buying a home, there's a very good chance that the house that you want to buy is going to be the same house that a lot of other buyers want as well. And when that happens, you may find your offer is going to be competing with one, two, sometimes dozens of other offers.
So the question is, how do you make your offer stand out to the seller? There's more to it than just offering more money. So in this blog, I'm going to share with you seven things that you can do to make your offer stand up and above all the other offers.
So if you're buying a home right now, it can be tough. You could get knocked down over and over and over again and not get your offer accepted and that is so frustrating. But I know that if you have a good coach, and you have a good strategy, and you're patient, you can win. The first thing you need to consider is the big one in the room, which is price.
How much more over the ask price do you have to go to win the offer?
That honestly is probably the million-dollar question because in Georgia, the offers are typically blind. So you don't know what any of the other offers are. What will typically happen is even if you're the first one to put in an offer, the other listing agent will come back and they'll say, "Hey, we have multiple offers and so we're calling for the highest and best by a certain time on a certain day." What that means is they want your best offer.
Don't assume that they're going to come back and counter your offer. In fact, they probably will not. They will take all the offers they have and present those to the seller at one time and the seller's going to pick the best offer. So you're not going to have a second chance. So make sure that the price that you put in there is your best price, the most you're willing to pay.
I want you to consider, a lot of buyers these days are offering a lot over ask price. I think there's a lot of people worried that market's going to come crashing down or bust and they're going to get stuck holding an overpriced house. There is always a chance of that because we can't time the market.
Timing the Market
The market goes up and the market goes down. We don't know when it's going to switch. Most industry experts in the beginning here of 2022 are thinking that prices are going to start to stabilize a little bit. Because last year we saw a 30% appreciation and we all know that we just cannot continue at that pace. So hopefully they start to level off.
The second thing you can do is offer more earnest money.
So let me explain what earnest money is. Earnest money is an amount you give to the seller's broker, or the attorney, or it can be our broker that they hold in case the buyer just doesn't show up to closing. So if you're a seller and you go to the closing table and the buyer doesn't show up, or the buyer breaches the contract in any way, you are entitled to that earnest money and it helps protect the seller.
So when you're buying a property, you do have some contingencies that will allow you to get that earnest money back. Say, for example, if something goes wrong with the inspection, or it doesn't appraise, or you lose your job within your contingency periods, you would get your earnest money back. After those contingencies expire, you no longer get them back.
If you put the earnest money down and you just do a standard amount, let's say 1% of the sales price your offer is going to look like everybody else's. So put more earnest money down. Put an amount down that's going to make the seller say, whoa, this is a serious buyer.
The seller will feel more confident that you are not going to just walk on the contract because if you don't have a lot of earnest money down, it's easy to walk on a contract.
So put a lot down and make sure that you have a good agent who's going to protect your earnest money.
The next thing that we put in the contract is the closing date. A lot of agents and buyers out there, assume that the seller's going to want a fast closing, but that is not always the case. On my team, we like to call the other agent and say, "What is the seller's situation? How long do they need to move out?"
Offer a Temporary Occupancy Agreement
Then we'll ask them too, "Would they like what's called a temporary occupancy agreement?" Which says that we close on a certain day, but you let the seller remain in the home for a little bit longer. Maybe it's a week, two. Maybe it's even a month. That will make your offer stand above all the other offers.
Offer Non-Refundable Option Money
The other thing you can do is offer the seller money directly just for the opportunity to go under contract with them. It's called option money. So in addition to the earnest money, which you will get all of the earnest money back on the day of closing, the option money goes to the seller and you don't get it back as a buyer, unless you specify it in the contract. But what the option money does is it tells the seller that “Hey, I'm serious.”
SECRET Bonus Idea
Here's one thing you can do to totally make your offer stand out.
I'm going to break it into two things.
The first is you can write a letter about the reasons why you love that property, so that you'll appeal to the seller's heartstrings - that always can go a long way. But you can take it one step further.
Everybody's got a smartphone these days. Instead of writing a letter, film yourself telling the seller exactly why you love their property and why you would love them to accept your offer. Then have your agents send that video.