Remember a few things when there are multiple, competing offers on the same property. The seller wants the highest price and the best terms for the property and the buyer wants the property for the lowest price with the most favorable terms. So what’s the best advice to both parties and their respective real estate agents?
1. The best price might not be the highest price – Sellers tend to prefer a cash offer, even when that offer is a lower price than one that requires financing from a lender. Sellers also prefer buyers who are pre-approved by their lenders so there’s no wait time involved to see if the potential buyer qualifies for a mortgage loan. And sellers like highly motivated buyers…buyers who “must” have that particular house for whatever reasons (sister lives across the street, school starts in three weeks, etc.) as highly motivated buyers won’t quibble (as much) over issues such as repairs.
2. When all the players know there may be a multiple offer situation (a hot market, a foreclosure, an auction, etc.) think about including a purchase price addendum to the offer – A price escalation addendum lets the seller know that the buyer is willing to raise the offer to a higher amount…an amount that may exceed the “highest” price offer.
3. Sellers’ agents ought to prevent buyers from renegotiating the price – This comes up when an appraisal price on a house is lower than the sales price. It may also come up if/when there’s a difference between the amount of the loan and the purchase price.
4. Anticipate buyer’s remorse when the seller signs the contract – The buyer may feel that they’ve overpaid or been taken advantage of when the seller signs the contract so they may want concessions such as asking the seller to pay for all repairs. Both sellers and buyers need to know that any and all requested concessions are up for negotiation between the listing and selling agents on behalf of their clients. Any experienced agent will know if/when a specific concession could “blow” the deal and how best to negotiate it.
5. Offers that include fewer upfront contingencies (obtaining a loan, appraisal differentials and/or costs, inspections, etc.), the better.
6. Choose the buyer and the seller with the best agent – The best agents are the most experienced with negotiations among clients, other agents, lenders, inspectors, etc. The best agents tend to be the nicest, the most courteous, the most responsive and the most results oriented.
7. Review the closing period – Some buyers want a shorter closing period (school may be starting) to get everything done. Some sellers may want a slower closing period (their new home isn’t finished being constructed yet). It’s possible that the seller may want to “rent” their sold home back from the new owner…remember, everything can be negotiated by the respective agents.
8. Provide a level playing field – Make sure that all the information and all the instructions about the property are the same to all agents. Make sure everything is in writing so that impartiality to all the players cannot be questioned.
In the Charlotte NC real estate, multiple offers occur every day. It’s frustrating to see buyers lose out on a property they really wanted. But remember if you’re a buyer and making an offer in a multiple offer situation, your leverage is limited. You must go “all in”. You must show the seller that you want to buy the house and that you are not just making an offer…there is a difference.
At TeamHeidi we have worked with many buyers who had worked with other agents and who had lost out on several homes. As you can imagine when these buyers came to us, they were frustrated to say the least! In most cases, it takes an experienced agent who is education, and a good negotiator to be the winning bid.
If you want to buy a house in the greater Charlotte, NC area, call Heidi Hines and her team of agents, they’ll make sure you get your dream home.