Dealing With Multiple Home Offers and Bidding Wars

When a residential property suddenly becomes attractive in the market, the seller and buyers tend to be surrounded by bids. This is a common occurrence with dated properties. The American Real Estate College states that myriad offers can surface for just one prospective home. It’s common for property owners to be overwhelmed by numerous proposals. For homebuyers, bidding against each other can be stressful and frustrating. Here’s what you should consider in case you want to understand how to deal with multiple home offers and bidding wars.

 

For Homebuyers

Because of the pressure that comes with bidding, you may think twice to compete against others who are interested in the same property. It always helps to participate and make your offer. Here are some useful pointers when you do:

• Give your best offer. Experts say that you should propose the highest price you can give and make it attractive to the seller. You can consult your agent about the pricing range.

• Let the seller know that you have what it takes. Before you send your offer, visit your lender and ask for a loan preapproval letter. This document can make you stand out. If you are preapproved, you are a more capable buyer in the eyes of the seller.

• Give a significant earnest monthly deposit. If you are determined to buy the property, you should pay a hefty earnest monthly deposit, which is part of the set down payment. Doing so tells the seller how serious you are about closing the property.

For Sellers

Once you decide to sell your home, brace yourself for a huge wave of competing offers. Below are some tips to help you deal with the chaos:

• Ask your agent to investigate. This is a prudent move to verify the offers. There could be strong contenders who might still be selling their own homes as they stand by to purchase your property. Your agent could find out if there is a potential buyer who does not have a contingency such as this. Even if the bid of this buyer is smaller, you can be sure that there will be no headaches accompanying it. This can lead to a smoother, quicker close.

• Compare the offers by using a spreadsheet. To have a clear picture of the bids you get, use a spreadsheet to compare them. Make sure to include their contingencies if there are any.

• Have a backup home buyer. Your agent can help find the runners-up to the best bidder for your home. If their offer can match the one that the top bidder has, then they can be your backup buyers. This is an advantage for you in case your top buyer ends up choosing another property to purchase.

Bidding wars and multiple offers for possible homes can be confusing, tiring, and overwhelming for both seller and buyer. At Team Prehoden, we do our best to help our clients realize their property goals. Please step into our office in Encinitas, California, for a one-on-one meeting. You can also contact us by dialing 858-217-5400 if you want to schedule an appointment or ask questions about our home buying and selling packages.

References:

https://www.thebalance.com/multiple-offers-competing-home-offers-1798836

https://www.nar.realtor/about-nar/policies/professional-standards-and-code-of-ethics/a-buyers-and-sellers-guide-to-multiple-offer-negotiations