How to deal with a multiple-offer situation
By: Robert Davis
You found a home your family absolutely loves. But you’re not the only one who feels that way and now you’re in a multiple-offer situation, competing against other homebuyers for the same property.
What’s the best way to make an offer on a home that other buyers are vying for as well? Here are some ways to put your best foot forward:
Start off with your best offer. This isn’t the time to start with a lowball offer and wait for the seller to make a counteroffer before you offer more. If you have competition, you’ll want to consider making your best offer right off the bat. That said, don’t let a multiple offer situation push you into offering more than you’re comfortable paying or can afford. Your real estate agent can help guide you in making your best offer.
Make sure you’re preapproved. Don’t be at a disadvantage among other home buyers who already have their financing lined up. Preapproval is a step up from prequalification and can help make sure your offer is taken seriously.
Don’t skimp on earnest money. An adequate earnest money deposit is a sign that you’re serious about buying the home. Your real estate agent can help with this.
Don’t waive the home inspection. In multiple offer situations, it’s easy to get caught up in the competition and do whatever it takes to win. You want to have as few contingencies in your offer as possible. To stand out, some buyers will even elect to not make a professional home inspection a contingency of their offer. Don’t do it! Home inspections are an important part of the home buying process and can help you spot costly problems.
Talk to your real estate agent. Your agent is an important guide in the home buying process. They may have some insights that could help get your offer accepted.
Make a backup/contingent offer. Even if your offer wasn’t accepted, consider making a backup offer. That way if anything changes — such as the initial buyer’s financing falling through — you’re there to step in. It’s estimated that about 3-4% of all real estate contracts fall through. Those aren’t huge odds, of course, but it does happen.
Relax. There are so many parts of a multiple offer situation you have no control over, so try not to let the stress get to you. If your offer is accepted, that’s great, but it’s not the end of the world if it isn’t.