Guide to Winning Multiple Offers!

Even with lower inventory, some of our listings have received as many as 11 offers in just the first weekend. In fact, the lower inventory often means buyers have to compete for the same home. So, if you want your offer to stand out above the rest while getting the best possible deal, stick around for my five tips for winning multiple offers—and one thing you should never do.

Tip #1: Ask Questions

Your agent is your best ally here, and their negotiation skills are crucial. They can build rapport with the listing agent, and their communication and reputation will carry a ton of weight when the sellers decide not only on the best price but also on who is most likely to get to the closing table without issues.

A good listing agent will provide as many details as possible to help their client, so asking questions is in everyone’s best interest. Your agent should ask how strong the other offers are and what makes them attractive. They might not be able to disclose every detail, but any bit of info helps. Make sure you’re working with an experienced agent who knows exactly what to do. Find out the deadline for submitting your offer so you know how long you have to decide or beat other offers that may come in.

Ask, “Other than price, what’s most important to the seller?” Maybe the seller has a hard close date or doesn’t want to do any repairs, so taking the house as is might make your offer stronger, even if the price is a bit lower. The worst they can say is no, but if you don’t ask, the answer is always no.

Tip #2: Consider Your Price

Your goal is to win the home and avoid a bidding war. Know your top dollar—what you’r

e comfortable paying for the home. I describe this as high enough that you won’t regret not going higher if you don’t win, but low eno

ugh so you won’t have buyer’s remorse if you do. Your agent can provide comparable home sales to help guide you, but ultimately, that number is up to you.

I usually recommend going a little over the nearest $5,000 mark because that’s where most offers will settle. For example, instead of offering $300,000, offer $302,000. Also, try to remove any concessions the seller might pay on your behalf to increase their net proceeds. Paying for your own closing costs can make a big difference.

Another way to beat a bidding war is to use an escalation clause. This allows you to offer a higher amount without drastically overpaying. Say you’re making an offer on a house listed at $300,000, and your max is $320,000. By using the escalation clause, you offer $300,000 and agree to beat the highest offer by $2,000, but not go above $320,000. If the next highest offer is $305,000, your offer becomes $307,000, beating the other offer without reaching your max, saving you about $13,000.

Always go up by at least $2,000 to make the price increase significant. Remember, what the seller nets at closing after all fees and costs is more important than just the offer price on its face.

Tip #3: Be Flexible with Closing and Possession

If the seller has a preferred closing or move-out date, try to accommodate. If they’re still working on getting their next home, be flexible with your date. You can choose a tentative date but specify that the seller will choose the closing date within a window, like 30 to 60 days after the contract is accepted. You can even stipulate that the closing date must be settled within 14 days of the contract’s effective date.

For a vacant house, the seller will want a quick close. A good lender who has all the necessary documents can often close in as little as two weeks. Check with your lender before committing to a quick closing, as some loans take longer. For instance, USDA loans might take 45 to 60 days. If your loan can accommodate a quick close, it will definitely give you an edge.

Also, consider the possession date. Offering the seller a few days after closing to move out can help, especially if they can’t move into their new home until they close on their current one. For example, closing on May 30th and taking possession at 5 p.m. on June 1st gives a clear date for you to move in and some flexibility for the seller to arrange movers. Make sure it’s clear who is responsible for the house’s state during this time. The seller should keep their home insured and utilities in their name unless you both agree otherwise.

Tip #4: Take Advantage of Your As-Is Options

We use an “in its present condition” addendum to win multiple offers without beating the highest price. This addendum assures the seller that they won’t be stuck with a list of repairs after the inspection. Here are the options:

– Option 1: You conduct inspections but waive the right to renegotiate while retaining the right to cancel based on inspection results. This protects you from getting stuck with more repairs than you’re willing to handle while assuring the seller they won’t need to accommodate repairs and can re-list quickly if you cancel.

– Option 2: You do inspections for your own knowledge but waive the right to cancel or negotiate. I don’t recommend this unless you’re confident in handling any repairs.

– Option 3: You waive the inspection period entirely. This is the most desirable for the seller, but it’s risky unless necessary to win the house or you’ve reviewed a previous inspection report and are comfortable with it.

Tip #5: Consider the Appraisal

If you have cash to put down, your lender might waive the appraisal contingency. This can be a huge advantage, especially when combined with the “in its present condition” addendum. The seller knows they won’t have to repair anything and can close quickly.

If you can’t waive the appraisal, offer to pay the difference in cash if the appraisal falls short. For example, if you offer $310,000 on a house listed at $300,000, you can agree to cover the difference if the appraisal comes in low. Write into the terms that you’ll cover the difference but it’s still negotiable if the appraisal value is too low. This keeps you from writing a blank check to the seller.

One thing I recommend avoiding:

Don’t write the Love Letter. This practice, once popular to humanize buyers and win seller sympathy, is now a big no-no. A good listing agent won’t even present your letter until after the seller signs the contract. Personal details can influence the seller’s decision based on protected class characteristics, which is against fair housing laws. A well-crafted offer will make you a better candidate than a personal letter. Leave this practice in the past and focus on the convenience and net proceeds.

Above all, make sure you have a clear idea of how much you’re willing to pay, when you need to be in the house, and be flexible where you can. Work with a skilled, seasoned agent who can help boost your offer to the top.**

Reach out if you would like a copy of our free home buying guide. It has a section on all the tips and tricks we recommend for multiple offer situations, plus a ton of other helpful info on home buying.