6 Tips for a Winning Offer in a Hot Market
While multiple offer situations are not unusual in the DC area real estate market, in recent weeks we have been seeing increased competition on new listings as inventory levels are at all-time lows. Current market conditions, especially for single-family and rowhomes, are hotter than they have been in recent years. For buyers, this means competitive multiple offer situations are the norm for new listings. There's no doubt that the offer price matters, but it's definitely not the only thing that matters when it comes to a seller's decision. While there's no one recipe for guaranteed success, we've found in our experiences in hundreds of multiple offer situations that there are a few key factors that impact offer acceptance.
Here are 6 tips for crafting a winning offer in a competitive multiple offer situation:
1. Be the first one in the door
See the home as early as possible and make a decision on submitting an offer as soon as possible. Having additional time allows you to be prepared with your offer ready to go before the offer deadline in case that becomes necessary, and also gives you time to think over the offer terms and do a pre-offer inspection. If a home is listed earlier in the week, it may not be available by the weekend - don't wait if you are able to visit sooner.
2. Ask questions
Find out what the seller wants and what factors will impact their decision. This is typically a conversation between the buyers agent and listing agent. We always find a phone call is best if at all possible for getting as much information as possibleFor some sellers price may be the most important, but for others, timing or minimizing the risk of a contract falling through may be their priority.
3. Give the sellers what they want
Give the sellers what they want. Although this may not be how home sales used to work, buyers really don’t have any negotiation leverage in this type of situation and accepting this is an important mindset shift. If a seller specifies a certain settlement date rent back, or other criteria they are looking for, it’s important to include these in your offer if at all possible.
4. Evaluate Risk
Consider what contingencies or requests you can eliminate while minimizing your risk. Each additional contingency could be a reason why a seller chooses a different offer. Include only the contingencies that you feel are critically important, with the shortest realistic timeframes, and don’t include additional requests for things like home warranties, closing cost credits, or anything that reduces the sellers bottom line.
5. Be ready to fulfill the offer terms
If you are using financing for your purchase, and you don’t feel comfortable removing the financing contingency, make sure that your lender is able to meet competitive timeframes for both a financing contingency and settlement date. Discuss with your lender in advance the pros and cons of submitting an offer without a financing contingency so that you can decide what is best for you.
5. Tell the sellers why they should accept your offer
Write a letter to the sellers with additional information about what interests you about their home. The listing agent may not present the letter to the seller, but they also may, so it doesn’t hurt to include one.