We are starting to see more competing offer situations these days with demand increasing and supply continuing to stay low. Buyers now have to compete with other buyers for properties leading to the great game of figuring out how to win when in a competing offer situation. Let’s take a look at what the rules are and how you can try and make your offer stand out to the seller as the obvious choice.
The seller has the ability to do basically anything they want when in a competing offer situation. They can keep the bidding as a ‘blind sealed bid’ or disclose to all parties any particulars about any offer. The ball is really in their court. If you as the buyer find yourself in the situation where the seller is disclosing the particulars of the offers, it is pretty simple what you have to do as you know exactly where you stand amongst the crowd. When it is the more common situation of not knowing what the other offers are, you have to play a different game.
Conditions – only write in conditions that you absolutely must have in the offer as a safety net and keep the deadlines short, five business days if possible. If you are confident in your financing don’t write in the condition. If you don’t feel the inspection condition is necessary, leave it out. Sometimes it can come down to which offer has less contingencies and not price.
Price – This is always a tricky one because it no longer matters what the market value of the property is if you are willing to compete with another offer or offers. The best way to determine the price you are willing to pay is by asking yourself if the price you are willing to offer is not accepted, you won’t kick yourself by saying you should have paid more. Determine how valuable the property is to you.
Deposit – The bigger the better. This can be viewed as a sign of strength and seriousness. The more you are willing to put up front, the better your chances.
Possession – Have your Realtor ask for the preferred possession date before writing the offer. If the seller gets the exact date they want, you haven’t created an obstacle that they have to deal with.
*Important to note – always write an offer in competition if you were going to make an offer without another offer in the picture. You never know where the other offer or offers will come in at in comparison to yours. Sometimes you can get lucky.
If you are not a fan of competing with others buyers for a house there is a little trick that can sometimes help you avoid this. DON’T DRAG YOUR FEET! If you like the property and think it is the right one for you, make an offer asap. You can only get yourself into trouble but waiting with a well priced and hot property.