How to Handle Multiple Offer Situations When Buying a House
The decision to buy a house in Grand Rapids is an exciting one, especially if you've spent a lot of time house hunting. Unfortunately, buying a house is not always as easy as simply submitting a bid. After all, there may be other buyers who are interested. If this is the case, then the seller will not only have multiple bids to choose from, but they'll have negotiating power. You may even end up in a bidding war, which is an enormous advantage to any seller. Such a situation is much more likely to occur in a seller's market. Fortunately, there are a few ways to improve your chances of having your offer accepted over other bids.
1. Secure A Mortgage Pre-Approval
Getting pre-approved for a mortgage can give you an advantage over other buyers. This is because you can prove to the seller that you'll be capable of securing the loan needed to close the sale. Buyers who aren't pre-approved can make as big an offer as they want; however, they may not be able to secure the loan they need to cover their offer. As such, a seller will often prefer that the buyer is pre-approved when accepting their offer.
2. Begin With A Strong Offer
If you're in a seller's market, then now is not the time to try and lowball the seller. The seller will assume you're not serious and accept a larger bid on the spot. If you begin by making a strong offer upfront, the seller will be more likely to spend some time weighing their decision.
3. Make A Larger Offer
If you know that there are other buyers circling the property, one way to beat the competition is by simply submitting the largest offer. If you have the budget and you are willing to pay a little extra, by all means, do so. However, make sure you know what your budget is and how much you're willing to spend before you submit an offer that's over the asking price.
4. Appeal To The Seller's Needs
Find out why the seller is selling and what their needs are. This information can help you to appeal to their needs. For instance, if you know that the seller needs time to find a new home after the sale, you can offer to make the closing date flexible, thereby giving them that time. The willingness to be flexible to appeal to the seller's needs will go a long way towards a successful bid.
5. Offer Favorable Terms
You can make the terms of the deal more favorable to the seller in a few different ways. For example, you can shorten or waive certain contingencies in order to speed up the closing process.
6. Make The Bid Personal
When a seller has multiple bids, they'll often choose the highest one. It's all just numbers to them, anyway. However, if you send them a letter introducing yourself and explaining why you want to buy the house, the process of choosing which bid to accept becomes more personal. You've put a face on your bid, which means it will no longer be a number. Sellers who aren't strapped for cash and who are choosing between offers that aren't far off from each other will often be swayed by emotional connections.
Even if your local real estate market isn't a seller's market, you should prepare yourself for potential competition when submitting a bid on a home. Knowing how to handle a multiple offer situation can help you strengthen your own offer and improve your chances of winning the bid. Keep in mind that when crafting an offer, a real estate agent can help ensure your offer has the best chance of being accepted.
