When homeowners have to compete against multiple offers for a home, they often have to learn how to negotiate to prevent losing the home that they have fallen in love with while on the hunt.
There is nothing like hunting for a house for weeks, putting down an earnest money deposit, and, then signing a purchase contract only to learn that someone has matched or outbid your offer. This is frustrating, but preparation can help you navigate this process. Here are our suggestions:
1. Write Your Offer as Soon as You Fall in Love
As soon as you view a home that you love, write your offer. Before writing the offer, you may want to contact the seller’s agent to determine if there are any recent showing or if anyone else is writing an offer. This will help you prepare.
2. Get Pre-Qualified or Pre-Approved
Showing sellers that you can obtain a loan from the lender for the amount that you are writing in your offer letter will improve your chances of being accepted. At least, they will know that the deal will go through pending no major problems.
3. Submit a Large Earnest Money Deposit
You should submit a large earnest money deposit to make sellers think you are serious about buying the home. When buyers get more money sooner than later, they feel more confident in your financial ability to meet the obligations of buying the home. The last thing a seller needs is for buyers to back out of the transaction or default on the contract after other buyers have ventured off to greener pastures.
4. Offer Some Perks of Selling to You Over Others
If you want to have an advantage over buyers, offer your sellers an extra three days to move out after closing. If you offer it without compensation, you will have an advantage over other buyers. You should be prepared to offer something to ensure that your offer is accepted over other bidders.
5. Shorten or Waive Some Contingencies
If you shorten or waive some of your rights to expedite the process, you will have a better success rate of getting your offer accepted. For instance, you may have 10 days for lead-based paint inspections unless you waive the right in writing. If you can get it done in three days instead of 10 days, you can get to closing faster. You can also waive the right to loan approval if you know that your loan is guaranteed. Some homebuyers will also waive the appraisal contingency.
If you want to compete against multiple offers, you should follow these tips. They will improve the probability of you receiving the home for the price you bid. If you want to learn more tips, they can be found online. Good luck on your home search and the bidding process.