Five Tips to Win a Multiple Offer Situation on a Home

By Kenny Whiteside, a Redfin real estate agent in Eastside Seattle

Don’t lose your game face. Though multiple offers aren’t quite the jungle they were back in 2012, homes in popular neighborhoods continue to face stiff competition. In August 2013, 60.5% of offers written by Redfin agents across the country faced bidding wars, a drop from 63.3% in August 2012. It signals a welcome trend for buyers, but tight inventory conditions and relatively low mortgage rates mean that multiple offer situations are still a reality. After seven years of helping clients buy and sell homes in the hot Seattle market, I’ve got a good idea of what buyers can do to make their offer stand out.

1. Be realisticPre-approval and homeownership

If you’re looking for a home in a sought-after neighborhood, be aware that a winning offer will likely be at or above asking price. This knowledge will help you construct a competitive offer at the outset that is still within your comfort zone. In early 2013, many buyers waived inspection and financing contingencies in an effort to win the bid. This approach can be effective, but it can also be an uncomfortable level of risk for some buyers. Knowing what you’re willing to do in advance will make it easier to make decisions when the timing demands it.

2. Prepare your financing

Whether you’re planning to get a mortgage or are paying in cash, make sure you have financial documentation ready to send. If you’re getting a mortgage, you’ll need a pre-approval letter. Being pre-qualified doesn’t cut it, since it doesn’t formally verify your income, assets and credit. If you’re paying in cash, be ready to submit proof of funds, which can be an original bank statement, open equity line of credit, copy of a money market account balance, or certified financial statement. Pre-approval or proof of funds need to be available at a moment’s notice and are expected, not optional. In addition, offering earnest money (often 1-3% of the purchase price) is another signal to the seller that you’re serious, so think about how much you’re willing to pledge.

3. Do a pre-inspection

In the past, inspections typically happened right after a seller accepted a buyer’s offer. However, the rise of bidding wars prompted savvy buyers to schedule inspections before placing an offer, giving them more knowledge about the home and making it easier to waive inspection contingencies. Doing a pre-inspection can put you ahead of other buyers by removing complexity from your offer, and also shows a seller that you mean business.

4. Be flexible

Selling a home can be a whirlwind. Any flexibility a buyer can offer a seller has the potential to reward them. Being lenient on closing or possession dates might make an offer more palatable to a seller in the midst of one of life’s most stressful times; moving.

5. Personal touch

Though it isn’t standard practice in every market, personal notes from potential buyers can humanize a transaction and tip the scales in your favor. I’ve seen several instances where offers were accepted based on the letter, even though they weren’t the highest. This works particularly well if the sellers are attached to their home, but not always so well for estates, where family members may have competing priorities and be less emotionally attached to the home.

If you’re anticipating a multiple offer situation, be sure to discuss your strategy and the risks involved with your real estate agent. With the right attitude and approach, you can get the house you’re looking for. For a video presentation of these tips, check out the Redfin YouTube page.

Kenny Whiteside

About Kenny Whiteside, Redfin Real Estate Agent
Kenny Whiteside has been helping people buy and sell homes in Eastside Seattle for over seven years. He works for Redfin, a technology-powered real estate brokerage that’s on a mission to change the real estate industry in the consumer’s favor. You can contact Kenny and read his client reviews on Redfin.com.

Discussion

  • http://www.firsthomeninjas.com/ Rich Spaulding

    I like the idea of being personal. Showing the home owner you are a human being and not some numbers on paper could influence an offer.

  • Jesse Morrow

    Actually.. a personal letter can be illegal as per familial status which is protected as per the equal housing laws. If you think it’s not..well.. Let me put it to you this way. If you write a letter that mentions your family at all, you might be influencing the seller to accept your offer. And if the other agents find out this happened, you could be in front of the Realtor Board fast. If you did a letter. Talk about anything but your family. Such as how amazing their house is. Be creative but don’t get into trouble.