I Don’t Want to Fight Over This House . . . but I Love it!
Sometimes you have the unfortunate luck to find a house that someone else wants, too. You are not the only one out there looking with your agent at the good houses when they come on the market. Or waiting for the price to drop to the right number. Some other smart, well-represented buyer may have the same plan. You have stepped into the mine pit known as the “multiple offer situation”.
When this happens, most buyers feel like the rug has been pulled out from beneath them and they have lost all control over the process. They do not even know if there IS another offer. They are afraid to “bid against themselves”. They want to run the other way. Except they really love the house. What can they do?
Understand that the existence of multiple offers must be disclosed ONLY when a buyer or their agent asks about previous offers and ONLY IF the sellers have approved that disclosure. Some sellers may not want buyers to know. But it is usually thought to be in the seller’s best interest to let the parties know there are other offers in order to raise the offer prices. So if the seller has OK’d the concept, ALWAYS ask that follow up question: who represents the other offers? Do you? If the listing agent is on both sides of the deal in the other offer, you would be smart to consider asking if you can by-pass that agent and submit your offer directly to the seller. Otherwise, that agent could just look at your offer, get his buyer to beat it by some small amount, and trump you. This IS permitted under the Code of Ethics followed by most agents.
First and most important, do not submit an offer where you believe there is or will be multiple offers until the selling agent tells your agent (preferably in writing) what the procedure will be that they will follow. Will they “work” just the best offer, will they come back one time to all offers and ask for “final and best” or will they tell each offer what aspects are not acceptable? Let the agent know right off the bat that if the procedure is not acceptable, you will not even be bringing an offer. As the buyer, you have all rights in these things, so you can elect not to make that statement, but it is important for you to know that you have the most leverage at that point. The sellers want any offer and they do not know the amount yet, so they are very anxious to see it. This is the time to make demands. Trust your agent on this.
Believe it or not, it is often NOT the monetary aspects of the deal that make the difference. If it is a seller who has lived in the home for many years, maybe let her know you not going to tear her house down as the other builder-offers would do. Or remove the mortgage contingency if you have the financial means to accept that risk. Some agents will also suggest you remove the inspection contingency. That is a hard thing to recommend unless the home is brand new with a great warranty. Maybe set a “deductible” that assures the sellers there will not be a “nickel and dime” mentality. That works a lot. If the seller has already purchased a home, make the closing date as soon as feasible and just push on the inspectors, lender and title company to move ASAP. That is worth money and peace of mind to a seller.
Lastly, you should send a letter or email saying why the home is your perfect next home and why you will love it as much as the sellers do. You would be amazed how much this counts in a multiple offer situation. The reasons have to be believable, but that is usually not too difficult. You would not agree to be in a multiple offer situation it were not a great house. This is not the time to play “coy” and point out the defects of the home. That technique is for buying a used car, not a home.
• You CAN have control in a multiple offer situation. You just have LESS control. So you better really want the house.
• You must know the process and establish a level of trust with the other agent.
• Buyers have to be willing to walk away if the process seems unfair or slanted against them. Just leave the door open if the other transaction falls through. Be nice!
• Make your offer the one the seller wants to accept. Think about what matters to this seller and give them whatever you can without overpaying.
To avoid these issues and others when buying a home, use the services of an experienced, trustworthy exclusive buyer’s agent. Sage Realty is one of the ONLY exclusive agencies in the Philadelphia metropolitan area. Even if you are buying in another market, ask us to refer you to the best EBA in that area. If you are a first-time home buyer, your fears will be eliminated. And if you have bought a home before, you will have a completely different experience. Contact Sage today.