While Supplies Last – A Guide to Multiple Offers
You’ve seen the advertisements. They scream, “While Supplies Last” in bold to get you to feel a sense of urgency. Don’t wait or you’ll miss it! Get it before it’s gone! Early bird gets the worm. Maybe you buy, maybe you don’t, but then you see it, still for sale, two weeks later, at a reduced price. We have become so accustomed to this scenario that we just assume it’s a “cry wolf” technique and that it will still be there when we want it. Sometimes that is true. Sometimes it’s not.
I have been through many real estate markets where multiple offers on the same house is the norm for certain areas and/or price ranges. It happens mostly when demand is high and supply is low. Buyers are often times looking for the same thing, in general. When we, agents, say we know want Buyers want, it’s because we hear it from more than one person and have seen it play out over and over. When listing agents give suggestions to make your house more marketable, it is based on their experience and what Buyers are looking for currently. When buyer’s agents tell you to act quickly and make your offer for list price or above with little to no contingencies, it is based on their experience and what they see and know to be the supply and demand of a particular area and/or price range.
Here is a short guide to having the best chance at winning as a Buyer in a multiple offer scenario.
- Be pre-approved.You MUST have a pre-approval letter from a reputable lender or a band statement showing that you have the entire funds to purchase the home BEFORE you go see the house. When you fall in love with the house and want to write an offer, it likely will not even be considered or be very far down the consideration list if you don’t send the pre-approval or bank statement with the offer.
- Act fast.My business coach, Micheal Burt, says, “If you sleep on it, you won’t sleep in it.” If you wait to go see the house, if you wait until tomorrow to make the offer, if you need to ask your parents or friends, you probably will lose the opportunity to be in the game.
- Get personal. In most cases, this is someone’s home that you want to buy. They loved it at one point – and maybe still do. Write a letter to the Seller (if you include a picture – even better). Tug at their heartstrings. Tell them what you love about their home and what drew you to it. Draw a mental picture for them as to how you can see yourself living, entertaining, and possibly growing in the home. Compliment them on their landscape choices and how your grandmother grew the same type of rosebush in her garden (you get the idea). Be sincere. Sellers can see through the smoke but if there are common interests or tastes, or memories something about it invokes, bring it up.
- Go all in and make it clean. When you are deciding on how to form the offer for purchase, don’t lowball in hopes that they will counter. Chances are, someone else has a better offer and they won’t even bother with you. Remember, they can only counter one offer at a time so you only have one chance to get it right. Some people will balk at offering the highest price they are comfortable with but when it comes down to a few extra dollars a month in a mortgage payment or losing out on the house, you have to make a choice. I tell my clients to imagine driving by that house next week only to see a SOLD sign on it and they weren’t the Buyer. How would that make you feel? Also, this is not the time to ask for everything but the kitchen sink (though you hopefully won’t have to ask for the kitchen sink as it should be included…). I digress. If you can bring your own closing costs, do it. If you are able to pay the difference of an appraisal coming in below the agreed to purchase price, don’t have an appraisal contingency. The less you ask for and the less restrictions you place on the sale, the better chance you have in getting the house under contract.
- Hire an experienced real estate agent and LISTEN to their advice. They have been through this before. They work in this market. They are not emotional about it like you are. They can help you through the offer and negotiation process. This is also important because there may be a house or a time in the negotiation process that you really should stand your ground and not give in because your emotions tell you that you’ll lose it if you do. Maybe there are some true red flags that you need to see. Your agent is not only there to help you get the house but to not make a big mistake either.
Michelle Froedge is a residential Realtor and Principal Broker in the Greater Nashville and Williamson County areas of Tennessee. “Mom” to four-legged fur baby, Tyler, Auntie to Zelamie, she is a vegetarian and sings in her spare time. Michelle has lived in Nashville and Franklin since 1997 and has been selling homes since 2004.