Tips For Winning Multiple Offers
This white-paper is to help you be more knowledgeable about what you can do to win in multiple offer situations. In this rapidly evolving market, where multiple offers situations can arise, and thus lead to pandemic pre-inspections, where buyers can lose out on more than one property before securing a home, various tools are emerging that we see buyers using to make their offering more attractive and effective.
Here are some of them:
– Conducting pre-inspection, time permitting, and submitting offer with approval of inspections (assuming they ARE acceptable), including sewer scope.
– Conducting title review, time permitting, and submitting offer with approval of title conditions (assuming they ARE acceptable).
– Conducting neighborhood review, time permitting, and submitting offer with approval of neighborhood conditions (assuming they ARE acceptable).
– Reviewing, receipting and waiving right to rescind offer based upon Form 17.
– Escalation Clause, where you are offering an amount over another offer, up to a maximum ceiling.
– Upon counsel with your lender, waiving your financing contingency, only if you are comfortable with what you hear from your lender about your lend-ability.
– When waiving financing but using a lender, stating (warranting) willingness and ability to cover any shortfall in appraisal, ONLY if you have enough cash or down payment, if appraisal were to come in lower than final agree-to purchase price.
– Using family cash to purchase, with the goal of refinancing after closing to return the loan. In this situation, you NEED to talk with your lender about how to structure the up-front loan; if you borrow family money and do not have a promissory note and deed of trust, with regular payments, etc., it can be very difficult to obtain a refinance after closing on an all cash purchase. TALK WITH YOUR LENDER IN-DEPTH ABOUT THIS.
– If using a Financing Contingency, waiving the “Conditioned on Appraisal” portion of the Financing Contingency, ONLY if you have enough cash or down payment, to make up any shortfall in appraisal.
– Offering a “Signing Bonus” check to be handed to the Seller, when the Seller accepts the offer, as a portion/total of Buyer’s Earnest Money, if no contingencies are being submitted.
Each of the above have gained varying levels of acceptance and familiarity in the local industry and are being used more in competing offer situations. Not every option works for every buyer, but we are remiss if we do not let our clients know what tools are available to help them win. We obviously do not encourage our buyers to put themselves or their earnest money at risk, and will discuss at length the pros and cons of each and every house our clients wish to pursue. Talking in-depth about your options is the best way to ensure you make the right decision for you, in your offering strategies.