Get Your Offer Accepted! How to Compete with Multiple Offers

By popular request, today we are going to be talking about how to get your offer accepted when there are multiple offers, and not by necessarily raising your offer price…and we are starting right now. 

Hi, I’m Jessica Genung with Active Realty and I’m a Realtor here in the Temecula/Murrieta Valley.  The first tip to getting your offer accepted in a multiple offer situation is to subscribe, like and comment down below.  Just kidding, but I would love it if you would:)

If you have been watching my latest market updates, we are currently in a very strong sellers market with very low inventory.  We have been up against multiple offers on almost every offer that we have written lately.  And we’ve been getting many of them accepted for our clients.  I’m going to share with you today some tips and strategies that I use to make my buyer’s offer appeal to the seller and stand out from the crowd. 

Here is how the process works. My business is currently about 75% buyer clients.  So most of my time is spent with buyers, showing them properties and spending time with each one educating them on the market and the home buying process, especially with my first time buyer clients.  Once we’ve found that home they love and are ready to make an offer on the first thing I do is pick up the phone.  

I’m calling the listing agent to talk to them about the listing, the seller’s situation and to find out if they have any current offers.  The answer lately, is yes, we have offers.  My next question is how many offers?  I also like to ask, does the seller like the offer/offers they have or do they want to see more?  Sometimes a listing gets so many offers, the seller just wants to shut it down and pick a good one.  It’s tough to come in in the 9th inning if the seller already has some great choices, but not impossible.  If they are still taking offers, I would rather come in at the very end.  Here is the strategy I use:

Tip #1 Find out what the seller wants! As I said a minute ago, I’m picking up the phone and calling the listing agent.  I’m going to try and get to the bottom of what does the seller want? The seller wants their price, the best price they can get, of course, but they also want other important things.  I’m going to ask the listing agent: how long of an escrow are they looking for?  Do they want to close ASAP, or maybe they need a little more time and some flexibility on the part of the buyer.

Here is a common scenario that we encounter often.  The seller is purchasing a replacement property.  They’ve already found it, made an offer on the property, and now just need to sell their current home.  Now this replacement property that they’re purchasing can’t close for 30 days or whatever, sometimes longer.  These sellers often ask for a 30 day close, but then want to do a short rent back and stay in their current home while the replacement property closes giving them enough time to move.  Buyer flexibility in this situation is a huge plus.  Close on the seller’s terms.  Big tip!

Tip #2 Eliminate baggage otherwise known as contingencies.  On a hot property with multiple offers, buyers writing contracts that are contingent on their current property selling are not going to get a second look.  They are going to get pushed to the side.  Seller’s only consider contingent offers when there are no other options, and sometimes not even then. 

Tip #3 Don’t junk up your offer. Don’t ask for things that should be negotiated during the second round of negotiations which is during the inspection period when you will likely be submitting a request for repairs.  Sometimes buyers want this pile of stuff cleaned out from the garage that has been left in the property, or the hole in this wall patched, etc. Of course we may want to ask for these things, just later. Don’t ask for a termite inspection or especially termite clearance on the purchase contract.  The buyer can order the Termite Inspection and pay for that, they aren’t very expensive about $85 and all this can be handled in the inspection period.  If needed, ask for it on the request for repairs after you are already in escrow and after inspection results have been received.  Also, maybe you don’t ask for a home warranty.  You can just buy one yourself if you want to sweeten the deal for the seller.  Seller paid closing costs are unlikely if you are up against multiple offers, unless you are going to be raising your offer price even more to compensate the seller for them.  You want to keep your offer as clean as possible to get your offer accepted and into escrow. 

Tip #4 Shorten Contingencies.  You could waive contingencies as well, but that makes me much more nervous, so I’m not going to recommend that in most cases.  Often times, shortening contingencies is an attractive option to the seller.  A common shortening I see is 10 days for the inspection period vs the standard 17. 14 days for the appraisal contingency vs the standard 17 days.  And shortening that loan contingency to 17 days from 21 if the lender is comfortable with that.  This is another great reason to work with a lender that will do pre-approvals upfront vs pre qualification.  You may have the ability to shorten the financing contingency, because most of the diligence has been done upfront.  For sellers, time is money and they love seeing contingency periods shortened.  Nothing worse for a seller than having the entire standard 21 day contingency period come and go, have the buyer then cancel and have to start the selling process all over.  If you can shorten up that cancellation period, they like that. 

Tip#5 Show that you are well qualified.  Everyone knows you need to submit your loan pre-qualification letter with your offer if you are not paying cash.  This is the online lender click click submit stuff. But nowadays, many lenders have the ability to go one step further for buyers and actually pre-approve a borrower.  This might sound like exactly the same thing to most people, but a pre-approval is much stronger. 

A pre-approval means getting their file in front of an underwriter early on in the process to ensure they are well qualified.  Not all lenders have this capability, but a few of my lenders certainly do.  So when I’m pitching my buyers offer to the listing agent, I’m able to confidently tell them my buyers loan is good to go and we pretty much just need a purchase contract and an appraisal.  

Also, when needed, my lender will also call the listing agent and affirm that my buyer is well qualified to purchase the home.    When a buyer is “pre-approved”, they have submitted all the required documentation and the file has been reviewed by an underwriter. This goes a long way because unfortunately there are many lenders out there that write pre-qualification letters without doing the proper diligence. Which can be a disaster quite frankly.  When I’m listing a property, the #1 thing I’m looking for in offers is are the buyers qualified.  Nothing matters in the offer if the loan won’t close.  The #2 thing I’m looking for is are the buyers motivated.  Which brings me to my next tip. 

Tip #6 Buyer letter to the Seller.  Ask the Buyers to write a letter to the Seller about why you love their home and hope to make it yours.  Maybe even include a picture of your cute family.  Some people think this is a little cheesey, but I assure you in a multiple offer situation this personalized effort may just make the difference.  Selling your home is an emotional experience for most people and sellers want a buyer who loves their home like they do and appreciate all the work and improvements they’ve made to it.  Agents and sellers want to put parties into escrow that are MOTIVATED.  There are often challenges that arise when purchasing a home…issues discovered during the inspection, various bumps in the road can arise.  We want parties that are reasonable and motivated, not that have a I can take it or leave it attitude.  A letter to the seller might not bridge two offers that are $10,000 apart in price.  But for two very similar offers, it just may put you in the lead. 

Along with the tips already described, like me as the Buyer’s Agent communicating with the Seller’s Agent, the Buyer writing a letter comes my email with your offer to the agent. I can summarize all the extra efforts like that and summarize the key points like the offer price, dates and loan structure. All of this packaged together can push our team across the finish line.

Tip#7 My final tip. Inspire Empathy. Hire a great Buyer’s Agent that is a good negotiator and can inspire empathy. There are some agents that just email over their buyer’s offers and don’t give any additional info to the listing agent.  They aren’t interested in negotiating on your behalf.  I always try to give the listing agent a brief backstory about my clients and why they are hoping to win the property.  Perhaps I share some difficulty they’ve had getting a home if that’s has been a challenge.  

Example:  I had first time buyer clients that were looking for a home, this was in North County San Diego.  They were in an entry level price point and therefore the market options were very limited and with a lot of competition.  We lost out on the first couple of homes they wanted, we got out bid.  

Along came the 3rd property which they liked even better than all the rest.  I call the agent to ask to show the property.  She says they already have 12 offers and they are making a decision today.  I ask if we can still see it.  She reluctantly says okay. We see the property, clients love it, I call the listing agent right after the showing and tell her we’ve got an offer coming.  She asks me to tell her about my clients.  So I do:) These clients were very close family friends, very qualified, and just wanted to get out of their apartment and settled into their new home because they just had a new baby.  I told her about our struggles with the other houses that we got out bid on and that these clients just wanted a house.  They were not picky buyers in the least.  They just wanted a house.  

We did go over asking price to get this house and their offer was selected that evening.  Even though we went over asking price, the property still appraised for $10,000 over our offer price.  Just because there are multiple offers on a home and you may need to bid over the asking pricing to win the property, does not mean that you are over paying for the home.  Often times it’s just a particularly special property with above average features, or it’s maybe a little under priced. 

These are just a few tips for getting your offer accepted in a multiple offer situation.  Any tips I missed?  Let me know in the comments below!  Thanks as always for watching my video! until next time…BYE!