How should buyers and sellers approach multiple-offer situations in our spring 2020 market?
I’ll start with buyers. Right now, we’re seeing less inventory and fewer listings than we’ve seen in the past. If you’re ready to make an offer and see a home that’s priced right, you’ll know whether you want to make an offer on it.
As I tell a lot of people these days, the offer price for a home that’s priced correctly is almost the minimum bid. It’s okay to make that minimum bid, but if you really want that property, you’ll have to bid higher. We’re seeing bids go $10,000 or $11,000 over asking price, but not crazy numbers like we saw before, which is good news. So again, just decide how badly you really want the property.
Escalation clauses are something I’m a fan of that can give buyers a leg up in multiple-offer situations. A lot of agents are afraid of them because they don’t understand them, but I strongly suggest considering them. They can end up being the reason you don’t miss out on your dream home because of just $2,500 or $5,000.
I recently put a home on the market that attracted four offers that, various terms and conditions aside, were all around the asking price. This means if you want your offer to stand out, you should consider things like putting more money down. I don’t like to see buyers waive their mortgage contingencies, but we’re seeing that a lot lately. We’re also seeing a lot of buyers coming in with home sale contingencies, which isn’t ideal, but it’s nothing to be afraid of either as long as you work with an experienced agent who knows how to ask the right questions.
In general, remember to put your best foot forward and make a nice, tight offer because buyers oftentimes don’t even know they’re in a multiple-offer situation. Writing a personalized letter to the seller won’t hurt either.
If you’re a seller in a multiple-offer situation, there are many factors to consider. You’ve priced your home correctly, but now is the golden moment for you to get exactly what you want. Price is important, but you also have to think about the conditions and terms of each offer. Another factor a lot of people forget about is when the mortgage contingency expires. If you’re looking to buy a new home after you sell, you’re not free and clear to do so until the mortgage contingency expires and the buyer can obtain their financing for the purchase.
As always, if you have questions about this or any real estate topic or are thinking of buying or selling a home soon, don’t hesitate to reach out to me. I’m happy to help.