Profile picture for ParkerColorado

What are the best ways to make your offer stand out when there are multiple offers?

  • April 03 2014 - US
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Answers (18)

Profile picture for pvhomes
Pay all cash. Remove any contingencies. Release deposit to Seller immediately upon execution of contract. Offer top top dollar you are willing to pay right of the bat.
  • April 10 2014
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The reasons you do it, SS, include: the kids are young now and won't be later, by the time the next cycle happens I'll've been paying off somebody else's mortgage instead of my own, and there may not BE a "next cycle," in which case, I will be wishing - not that I didn't buy more property in the '90s and early 00s, but in the mid'10s!
  • April 10 2014
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Profile picture for SteadyState
My two cents:

If you must buy a property in a market where there are multiple offers - the only thing that works is money. The highest offer will win. If two offers have the same price the offer with fewer contingencies wins.

Having said that. In a multiple offer situation  you will overpay for the home. Why enter a financial transaction where as a buyer you have the weak hand? RE is cyclical. Prices peaked in 2007. They came down by 30%-45%. It look 7 years for values to come back to 2007 levels. Now they will overshoot and will come down. If you can  wait, wait; buy later when you as a buyer have the upper hand.
  • April 10 2014
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Money Money not to mention Terms.   If the property is everything you want and you simply cannot live without it than what is another $10,000 more or less?   I'm just using $10,000 as an example but the idea is that more money catches a sellers attention like nothing else.  A close second to money are the terms. If you can wrap up the sale quickly and without issues your offer will be more attractive.   Being flexible is another positive thing.  Maybe you can close in 4 weeks but the sellers needs 6 weeks to move out. Give it to them. 
  A letter to the owner is also a good idea. If you have kids use them  LOL  ! Perhaps the kids are looking forward to playing in that big yard?  Let the seller know how much you love their house and its features.
  Be strong and keep trying.    
  • April 10 2014
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Hi ParkerColorado,

In today's real estate market, every offer is a battle! You are going up against competing offers and everyone is trying to get the seller's attention. Here are some ideas we got from listing agents who accepted our customers' offers over competing offers:

1.) Write a letter to the seller from your heart about your desire to purchase the sellers home.
 
2.) Sellers want some level of confidence that the buyer they choose can actually make the purchase and the financing will not be an issue. Be sure that you are pre-approved and that your pre-approval letter is solid (and not just a pre-qualification).
 
3.) Strengthen the pre-approval letter with a call from the lender. Imagine you were the listing agent or seller trying to decide which offer was best. If you had five offers all accompanied with pre-approval letters but one lender called you and shared the level of confidence they had in their pre-approval, this may tip the scales in your favor.
 
4.) Have your lender attach a cover letter to your offer, with your letter from the heart and your pre-approval letter.

Please feel free to contact me with any questions you may have!
  • April 10 2014
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ParkerColorado, (sorry for 2x post, other one needed editing)

The agents all bring up good ideas but what no one mentioned is to obtain a COMMITMENT LETTER (loan approval) from a lender prior to house hunting.  Some lenders (I can only speak for my company as most companies won't issue these) will issue what we call a Pre-Approval Commitment.

A "Pre-Approval Commitment" is basically the same process you'd go through once you have a property under contract except your loan approval won't be for a specific property.

For instance, lets say you just received a Pre-Approval Commitment today and later today you make an offer, your agent would note in the contract you have a loan commitment, you'll win out 10 out of 10 times over another financed offer (assuming same offer terms).  Who wouldn't want the offer that has ALREADY secured a firm commitment.  This is how I secured my home since I was purchasing in a highly competitive market/area and needed an edge.

As a point of clarification, a Pre-Approval is just a bunch of data put into a loan system and ran through a computer program.  If that's all you needed to close on a home (excluding the appraisal), there wouldn't be a need for loan officers.  Data can be misinterpreted, input incorrectly, etc.  This is why underwriters have jobs since it's their job to review the automated approval, the conditions it requests and ultimately issue the FIRM loan approval (no longer "just" a pre-approval).  An agent stated below that all you need was a "DU Approval" (automated "yes" in the loan system) and you're basically closed on a loan, that's incorrect.  Until an underwriter reviews the file, nothing is "firm" but most sellers will entertain your offer with only a Pre-Approval letter though that doesn't set your offer apart if your terms are the same, my suggestion in the earlier part of this response on the other hand, is the next best thing to a cash offer.

Feel free to reach out to me via my profile if you have additional questions.

Happy House Hunting!
  • April 04 2014
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ParkerColorado,

The agents all bring up pretty standard suggestions but what no one mentioned is to obtain a COMMITMENT LETTER (loan approval) from a lender prior to house hunting.  Some lenders (I can only speak for my company as most companies won't issue these) will issue what we call a Pre-Approval Commitment.

For instance, you make your offer today and note in the contract that you've already obtained a loan commitment, you'll win out 10 out of 10 times over another financed offer (assuming same offer terms).  Who wouldn't want the offer that has ALREADY secured a firm commitment.  This is how I secured my home since I was purchasing in a highly competitive market/area and needed an edge.

As a point of clarification, a Pre-Approval is just a bunch of data put into a loan system and ran through a computer program.  If that's all you needed to close on a home (excluding the appraisal), there wouldn't be a need for loan officers.  Data can be misinterpreted, input incorrectly, etc.  This is why underwriters have jobs since it's their job to review the automated approval, the conditions it requests and ultimately issue the FIRM loan approval (no longer "just" a pre-approval).  The point I'm trying to address is the comment below by one of the agents that all you need was a "DU Approval" (basically that means an "Approve" decision by the "computer program") and you're basically closed on a loan, that's incorrect.  Until an underwriter reviews the file, nothing is "firm" but most sellers will entertain your offer with only a Pre-Approval letter though that doesn't set your offer apart if your terms are the same, my suggestion in the earlier part of this response on the other hand, is the next best thing to a cash offer.

Feel free to reach out to me via my profile if you have additional questions.

Happy House Hunting!
  • April 04 2014
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CASH, No Contingencies, Quick Close
  • April 04 2014
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A few ways to make your offer stand out and possibly increase it's success are:
Larger down payment & definitely include a pre-approval letter
flexible closing date
few concessions (no home sale contingency, inspection repairs, etc)
Ask your realtor to make your offer in person (a personal connection goes a long way)

Good luck with your home purchase
 
  • April 04 2014
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Here's what I tell my buyers in this order:
More money down
Shorter contingency periods: inspection, financing, appraisal
shorter escrow period: "30 days or earlier"
Waive request for repairs or offer to take the property "as-is"
and ALWAYS write a nice letter to the seller 
 
  • April 04 2014
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Profile picture for RJ Dean
I am sure many of the responses on here have been covered already but, here working with many buyers and sellers on each side, here is what I have found:

Placing more money down in escrow (This one is great because it doesn't actually cost you anything more than you would be spending at closing, but makes the seller feel more secure that you wont just be walking away...)

If you are a cash buyer, offering to close within a 2 week time frame or less

If you are diligent, lowering the days on your inspection period and getting the inspection done ASAP so the contingency is out of the way.

If you are not absolutely in need of them and can afford them out of pocket, dont ask the seller to cover your closing costs and pre-paids. Most people love to do this if its an option, but remember, whatever the seller is giving you in closing costs comes off of his bottom line and ultimately means the property will have to appraise for a higher amount.

And finally, basically asking for as little from the seller as possible. With multiple offers, I have seen the seller take a lesser offer in price over making some minor repairs for a higher offer due to convenience and liability if the deal falls apart. If you don't HAVE to ask for it, consider just closing and doing it yourself and you might just get the deal! 
  • April 04 2014
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More money, fewer contingencies.

  • April 03 2014
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Is the property for sale as REO/foreclosure or privately owned?  If you are dealing with a bank writing letters and approaching the listing agent will not help as much as they would on privately owned properties.  An offer submitted on a REO (real estate owned) or foreclosures will be strongest when financing is NOT FHA, VA or USDA.  These properties often have issues that will require repairs.  Most banks or HUD will not make repairs,however, some will make appraisal required repairs up to a certain amount.  So, strong Conventional financing or cash is most desirable.  Then the rest of the offer needs to be clean, no contingencies, no closing costs, no extras, combined with the highest price you are willing to pay to get the property.  You may need your Realtor to run the comparable sales in the area to help determine the best top price and compare it to what you are willing to pay.  Sometimes, adding an extra $101 to the offer price can help too.  Be patient and good luck!
  • April 03 2014
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One way to have your offer stand out is to have a pre-approval. Many sellers will not take your offer seriously if you do not have a pre-approval. A pre-approval show that you have the ability and means to buy the house. If you have not yet gotten pre-approved, I recommend you do so. So the best thing for you to do is to speak with a knowledgeable lender to see if you can get started on financing a new home. If you need additional assistance, feel free to reach out. Good luck!
  • April 03 2014
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Make it as clean as possible.  By this I mean do not ask for closing costs, close in a timely manner 30-45 days or quicker, have a letter from your qualified lender with the address on it, and pay as high as possible. If a home is underpriced you may need to pay over asking price to win in multiple offers.
  • April 03 2014
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Profile picture for blub blub blub
The cleanest offers are the best.  Cash vs. financing, contingent offers vs. non contingent offers, closing date or flexible closing date.  These all factor into your offer.  Price alone is not always the best offer.

It is also an emotional decision for many.  Perhaps having your agent present the offer in person, or at least calling the other agent, would help rather than just faxing/emailing it in.  There are ways of letting the other side know how much you like the property without giving to much away or looking too anxious.Sellers want to hear that their home is liked.  For example.  An elderly couple that raised a family in the home may prefer to know that a nice young couple getting ready to start a family of their own is interested in the house as opposed to someone who is going to come in and tear everything out and make big changes to the house.  

You'll never know what the other offers are, so address it as though you only have one shot. Make it your best offer from the beginning and hopefully you win out over the others.  Good luck
  • April 03 2014
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Profile picture for craigfial
As mentioned below, if you are financing, make sure you have a DU Approval, meaning you have been completely approved.  The only condition is property/appraisal/clear title.

You can also add offer what is called an Elevator Clause. Meaning, you offer for example $1,000 over the highest and best offer up to: $xxx,xxx  

That will keep you ahead of the pack unless someone bids more.

Good luck!
  • April 03 2014
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Financing ! Honestly Financing is going to make or break your offer. Are you 20% 10% 3% 1% ? FHA VA CONV cash ?. With multiple offers Financing is going to make the biggest difference. You might be the nicest person in the world but the listing agent is going to suggest the deal that is strongest and WILL close. 

And you better have your closing costs.

Also make sure agent speaks with the listing agent so you can find out what the seller expectswith closing dates and what not. 

Writing a nice bio with a cover page helps to.


RJ Hackworth
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  • April 03 2014
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