It can be difficult to buy a house, especially in a seller’s market. When there are plenty of buyers competing for the same place, you may find yourself in a multiple-offer situation. While this can be frustrating, there are strategies you can use to get your offer accepted and win. Here we’ll dive deeper into what you can do to beat other offers on a house.
- While going above asking price is essential in a seller’s market, there are other ways to attract a seller to your offer.
- It’s important to be flexible and address the seller’s needs and preferences as much as you can.
- By connecting to the seller on an emotional level, you may increase your chances of getting your offer accepted.
Make an Offer Above the Home’s Asking Price
In a seller’s market or multiple-offer situation, going above asking price is a non-negotiable. “Refrain from giving low-ball offers, especially when in tight competition with other buyers willing to bid higher to win the property. You’re likely to spend more money when you refuse to settle for a higher bid,” explained Warner Quiroga of Keller Williams in an email to The Balance. You may also miss out on the house you wanted.
Connect With the Seller
Selling a home is an emotional time for many people. In many cases, sellers have spent a significant part of their life living in a place and making memories there with their loved ones. “If you can connect with the seller on an emotional level, one that makes selling a home more than just a transaction, your offer has a good chance of standing out,” explained Richard Connelly of Coldwell Banker in an email to The Balance.
Connelly had a client who found the perfect home to raise their kids and grow their family. They decided to write a letter about how much they loved the home. Within the letter, they described how they envisioned living there happily for many years and watching their children grow up. They also explained how different aspects of the property would benefit their family.
This letter moved the seller, and the other offers—which were higher—were pushed aside as the seller wanted the family to take possession of his house rather than sell it to someone who just wanted it for an investment property. For many sellers, their home is special and they want to see it go to someone who will love it.
To make a more personal appeal when putting an offer on a house, you may want to consider getting creative—on camera. Real estate broker Lambros B. Demos suggests recording yourself in a video, speaking directly to the seller. Tell them why this is the right home for you and your family, he encourages in an email to The Balance.
Work With a Qualified Agent
Make sure your agent is in close communication with the listing agent. “They should know what the perfect offer looks like as well as the amount of interest in the house and other things that are important to the seller, such as the ability to stay in the house for a certain period of time or ability to delay closing, etc.,” said Patricia Clark, a real estate agent at Keller Williams in an email to The Balance.
The real estate agent you choose should have a solid understanding of what the market is doing at the exact moment you’re house shopping so they can advise you accordingly.
Use an Escalation Clause
In a seller’s market, an escalation clause makes sense. “It means that you’ll pay a certain amount over the highest offer as long as you have proof of that offer,” explained Khali Gallman, sales associate at Coldwell Banker in an email to The Balance.
For example, you might offer $400,000 but promise to raise the offer $1,000 above any offer to a maximum of $425,000.
Offer To Cover an Appraisal Gap
When houses are selling way over asking price, the chances of an appraisal not meeting the purchase price is quite high. That’s why an appraisal gap is a good idea.
“An appraisal gap states that you’ll make up any shortfall in the event the appraisal comes in lower than your offer,'' explained realtor Bill Gassett in an email to The Balance.
Let’s say you’d like to purchase a home for $525,000 and the appraisal comes in at $500,000. In this case, you’d bridge the $25,000 gap with an additional deposit.
Be Flexible With the Closing Date
Oftentimes, flexibility is more important than money to sellers. “Pick the closing date that works best for the seller. If the seller wants 60 days and you can be flexible, do it,” said licensed realtor Jim Armstrong in an email to The Balance. Armstrong’s clients have won bids when they could not pay as much as the competition because they were flexible with the closing date.
Don’t Ask the Seller for Too Much
At the end of the day, most sellers are looking for what nets them the most. “If they’re asked to contribute to closing costs, resale certificates, home warranty, etc,” they’ll see that as an expense to them,” explained Alicia Chmielewski, real estate agent at Keller Williams in an email to The Balance. You should plan to cover these expenses on your own or increase your offer so it’s a wash for the seller if they do pay.
Pay for the House All in Cash
An all-cash offer is ideal when there are multiple offers. If you can’t pay in all cash, however there’s another good option that can help you stand out from the crowd: a large down payment.
“This will show the seller you’re serious about buying the property,” explained real estate agent Marc De Diego Ferrer in an email to The Balance. “Plus, a larger down payment means you will need less money from the lender, making your mortgage more affordable in the long run.”
Get Preapproved for a Mortgage
Unless you’re able to make an all-cash offer, a preapproval is a must. You will find that a number of mortgage lenders offer fully underwritten preapprovals. This means that your credit and finances have been checked and verified. “Basically, it’s an “all-clear” sign for your loan,” said Dustin Fox, real estate agent and co-owner of Devon and Dustin Fox—Fox Homes, in an email to The Balance.
The preapproval will give you an extra boost of confidence. Even if you have a financing contingency in the contract, the seller will consider you a safe bet to purchase the house and follow through.
Frequently Asked Questions (FAQs)
What happens when there are multiple offers on a house?
When there are multiple offers on a house, the seller can either accept the best offer, counter all offers to give buyers the chance to come back with better bids, or counter the offer closest to the selling price and terms they’re hoping for.
How do I make an offer on a house?
Once you figure out your offer price, contingencies, and timeline, let your real estate agent know. They’ll be able to write up the offer and submit it to the seller’s agent so that it can be presented to the seller.
How long does the seller have to respond to my offer?
There is no set timeline for when a seller must respond to your offer. However, most sellers respond fairly quickly, usually within 72 hours, so you shouldn’t have to wait too long to find out where you stand.
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