Multiple Ways to Handle Multiple Offers
With demand high and housing inventory low, multiple offers for properties on the market are an increasing reality throughout the country. Buyers in these markets are learning to expand their searches and the importance of making their first offer as strong as possible to beat out the competition.
Meanwhile, it may seem like sellers have the easier task of simply choosing the offer with the best bottom line. Of course, it’s the more enviable position, but selling in a seller’s market does come with its own complications. This means it’s best to have a strategy in place before you list your home for sale if you expect to be inundated with offers.
As They Come
Traditionally, sellers would receive a single offer and accept, reject or counteroffer and begin a negotiation process that aims to end with a sales contract. Living in a hot real estate market doesn’t mean you have to abandon this approach.
Sellers are always free to address an offer directly when it comes to them. Accepting or rejecting an offer is relatively simple, regardless of the circumstances. However, entering into a negotiation may complicate things. Typically, a counteroffer is binding for a short period, often 24 hours. If a new offer arrives after you have submitted a counteroffer, you would not be able to accept or negotiate with the alternative buyer until a resolution is reached with the initial one.
Set a Deadline
When buyer interest is expected to be high, it’s common for sellers to pre-determine a date to review all offers simultaneously. Usually, this occurs within a few days of listing or following the first weekend the house is on the market.
Communicating this to buyers and their agents encourages showings and can lead to stronger initial offers. Buyers will have the convenience of knowing what days showings will take place and can consider their options without wondering if a better offer could be arriving soon.
More Than Price
Of course, sellers are best served by remembering that sales price is not the only important factor when comparing offers. The impact of a higher price only counts if the sale makes it to closing. A pre-qualified buyer with a larger down payment may be a safer bet, especially if appraisals are struggling to keep up with a fast-moving market.
Additionally, contingencies such as selling a current home or the estimated time until closing can make a substantial difference. You may want additional time or a lease-back to make moving out more convenient. Or a quick turnaround to closing could be most appealing. And in most cases, fewer contingencies will mean fewer chances for the deal to fall apart.
Taking advantage of a seller’s market means you’ll likely be a buyer soon enough. Be sure you have the best offer possible ready for your next home by partnering with a lender you can count on. Visit OpenMortgage.com or call today to speak with a loan specialist to get started.