In a seller’s market—when the number of viable buyers vastly exceeds the number of available properties—it’s common for homes to receive multiple offers. For buyers, it can be a challenge going mano a mano with other interested parties. You’ve found that diamond-in-the-rough house, but so have five other people—and they’re just as qualified and determined as you!
To help you come out on top, let’s look at the offer process from the perspective of the seller: What are the seller’s options when there are multiple offers, and what type of offer is most likely to be accepted?
What happens when a seller receives multiple offers?
While we’d like to think that all buyers who make an offer are on an even playing field, that’s just not the case. No rule exists that says a seller must give all offers the same amount of consideration; if a seller gets an offer she likes, she can accept it right away.
“The seller really has most of the control here,” says Realtor® Joyce Mitchell with Mitchell & Associates Real Estate in Bigfork, MT.
When there are multiple offers, the seller typically takes one of three actions:
- Accepts the most favorable offer
- Counters all offers to give everyone a chance to come back with a better bid in an effort to get the best price and terms
- Counters the offer closest to the price and terms the seller’s seeking
What makes a good offer?
If you want to make your offer stand out, money certainly talks.
“If the seller receives an all-cash offer that’s at or above asking price versus an offer under asking price that requires a loan, they’ll take the first offer all the time,” says Maria Jeantet, a Realtor with Coldwell Banker C&C Properties in Redding, CA.
The terms of the sale are important as well. These terms could help make your offer more appealing:
- Providing a pre-approval so the seller knows you are already locked for the mortgage amount you need
- Waiving your right to an inspection
- Offering to close on the seller’s timetable (Sometimes a seller wants to close ASAP, or wants to wait until the kids’ school year ends.)
How to make yours a winning offer
It’s important for home buyers not to assume that they’ll get the opportunity to submit a counteroffer; the seller has no obligation to honor this desire. Therefore, you should submit your highest and best offer from Day 1 to make sure it’ll be given the utmost consideration, says David Welch, a Realtor with Re/Max 200 Realty in Winter Park, FL. This is especially important if you’re bidding on a bank-owned property as the bank is unlikely to counteroffer.
In some instances, even offering over asking price could be the best (and maybe only) way to secure the house you’ve been dreaming of.
Heed the advice from your real estate agent (who knows the real estate market in your area) and financial adviser or lender (who knows how much house you can afford) to formulate a competitive yet realistic offer.
