Many sellers are experiencing the summer slowdown as buyers have been busy vacationing, but the first time homebuyer market remains constant and multiple offers are still common.
Last week I was contacted by a young couple that had worked with another agent earlier this year and lost out on two offers that were in multiple offer situations. The buyers were frustrated and blamed the agent and stopped looking until their contract expired. I showed them six homes on Saturday, all of which were only on the market 1 or 2 days. My clients found one that they liked and again they were in a multiple offer situation but this time they won.
I don’t believe it was the previous agent’s fault that they lost in the previous situations, but rather a lack of education in the process. My advice to my clients is; as soon as you think you are interested in a property write an offer immediately. You will get the best price if you can negotiate with the seller before another offer comes in. If a property has only been on the market for a couple of days, offer full price and if you want the seller to pay your closing costs; add them to the purchase price. If the seller gets a full price offer they are likely to accept it. Have a pre-approval letter from a well-known, reputable lender. Keep your closing date as short as possible, which is about 5 weeks for the loan process. Keep your inspection period as short as possible, but allow enough time to get your inspections done and re-negotiate with the seller if needed.
I prepare a market analysis for my buyers so we feel comfortable with the value and the expected appraisal price. Once the buyers have compared the market analysis to the property they want to buy, I ask them to give me a price, so that if they lose in multiple offers, they will have no regrets for not going higher. It works much better if the buyers determine with the price to offer as they know what the home is worth to them, and then they are at peace if they lose.
I always make the purchase agreement contingent on the property appraising for the purchase price or the buyer has the right to cancel, and I make sure the purchase agreement includes all required documents and the forms are complete to make it as easy as possible for the listing agent to get the seller’s approval quickly. I also include a note about who my buyers are and why they love the home.
There is no guarantee that you will never lose in multiple offers, but an experienced real estate agent can help you determine the best negotiating ideas for the home you would like to buy.
Ask the Real Estate Agent is a weekly column by Cheryl Kempenich of Coldwell Banker Burnet, who lives and offices in the Chisago Lakes Area. Submit your questions to firstname.lastname@example.org. All information is deemed reliable but not guaranteed. For legal assistance consult an attorney.