I wrote this article spring of last year. At the time we had 296 single family homes for sale and I thought the inventory could not go any lower. I was so wrong. So very, very wrong. In February we had just 141 homes available and our rate of sales has actually increased, slightly. To say this is a competitive buyer's market is an understatement.
However, this does not mean that prices are going up in a huge way. There are a ton of reasons for this, and I will say more about this topic in another post. The take away for this post is to know that the difference between winning a great house at a decent price and searching for the rest of your God Given Weekends is not just the price you offer. There are a host of ways to make your offer the winning offer.
This is the story of a couple who wants to know how to buy a home when there are multiple offers--read this and see if this is your story too!
The phone calls are starting to acquire a plaintive quality. A potential home buyer calls with a tale of woe and frustration in the home buying process.
Today's call was from a guy we will call Jim. Jim and his wife, Sally, have been trying to buy a home for their little family for eight months. Their lease is up in two months and their daughter, Sarah, starts kindergarten this coming fall. They need to buy a home.
Jim and Sally have done everything right. They are pre-approved for a loan. They have a great down payment, excellent credit and steady employment.
Jim and Sally are normal folks. They have a modest budget and they want a livable home in a great neighborhood. Dudes. Can I be honest? This is what EVERYONE wants and that's why these homes tend to have multiple offers. Adding to the pressure is the fact that our inventory of homes for sale is astonishingly low. Jim and Sally have lost out on every offer they've made.
In a fit of desperation, they called for help. As a listing agent, I see more offers than the average bear, and I am able to give some sage advice.
Do Your Homework!
- Find out what similar homes have sold for, and be prepared to meet or exceed that value.
- What does the seller want? Price is king, but what else is important?
- What does the listing agent want? Multiple offer situations are a tremendous amount of work. Making life easier for the listing agent is vital.
Write a clean, professional purchase contract
- It must be properly filled out (the majority of contracts I receive are not).
- Follow accepted normal time limits for your area.
- Do not ask for anything extra. No credits, personal property or sub-par financing. If you need these things, look for a home without multiple buyers.
- In fact, if you can, give shorter than normal contingency periods or remove contingencies altogether. (This should only be done with a complete understanding of the consequences! Consider doing a pre-inspection, if time and the seller allows)
- If this is a short sale, trust, probate or REO, make sure your agent knows ALL the forms required. Chasing after basic paper is crazy making and I resent an offer that makes me do it. (See "Do Your Homework.")
Show the Listing Agent You Can Do It!
- Back your offer with outstanding documentation. Prove that you have liquid assets, a job and can get a loan.
- Don't get a loan from cousin Guido. Get a loan from someone the listing agent respects.
- Write a short note to the seller and listing agent. This note should be one part schmaltz, "I love your home because..." and two parts practical, "I can close escrow with no drama because...".
As a mentor of mine puts it: I want the best price, the sanest buyer and the best agent. The good news is that, today, everyone is pretty cautious on price, even in a multiple offer situation. Make sure your stuff is in place and you will maximize your chances for success.
Now, go sic 'em.
Kendyl Young blogs daily at www.KendylsOpenHouse.com and she covers Glendale Home Values, La Canada Flintridge Home Values and La Crescenta Home Values. You call or text her at 818-396-7588 or email firstname.lastname@example.org. Send her amusing tweets to @kendyl.