The 10 Key points to remember when entering into a multiple offer situation to purchase a property: How to set yourself up to win in a Multiple Offer Situation!
Drafted By Real Estate Expert: Melissa Kubek.
You’ve finally found the best home for yourself and unfortunately so have 6 others! What’s worse is you learn that the offers aren’t being presented until Sunday after the open house and there could potentially be even more interested parties! You don’t want to miss your opportunity to purchase this wonderful home, so the question becomes, “ how do I make MY offer the most attractive offer?”.
Ideally the best offer looks something like this:
1) Highest Bid (Secured Cash/Financing).
2) Congruent with the Sellers’ timeline for moving dates.
3) No conditions to the offer = Firm and binding offer. All the Sellers have to do is sign on the dotted line and their home is considered sold.
4) Include a large deposit.
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As a Realtor® I don’t recommend purchasing any home without conducting proper and adequate research on a property including but not limited to completing a certified home inspection. The following are 5 key points to remember when entering into a multiple offer situation to purchase a property:
1) Keep in mind you’re competing…Yes, it’s a competition and therefore you must quickly understand that you’ve all but lost your ability to negotiate in your favour.
2) Do Not, come in with an offer lower than the asking price unless you truly feel the asking price is completely unrealistic and you’d be willing to lose the home based on this belief. You get one chance to make your best play and put your best foot forward. The opportunity to negotiate back and forth in order to reach an agreement does not typically exist in a multiple offer situation, though it can in some rare circumstances.
You typically get one chance, one opportunity. So – be sure to Ask these two questions to the Sellers’ agent!
3) How many other offers are being presented; and
4) How many, if any, of those offers are yours (meaning the Sellers’ agent is representing both the Buyer and Seller for the same transaction/property). This is important to know because quite often we see Sellers’ agents give discounts and deals by reducing their commission and as such weighing the scale down in their favour such that their offer gets accepted by the Seller and not yours. Legally if the Sellers’ agent is offering a discount to a Buyer they are representing in a multiple offer situation, that Sellers’ agent must also offer that discount to everyone else who brings an offer, thereby evening out the playing field for all. If you don’t ask, you may not find this out.
5) Have all of your ducks in a row prior to writing the offer! This means ask to see certain pertinent documents ahead of time, such as: a copy of the property site survey (if available from the other realtor or city hall), the property disclosure statement, a copy of a recent title search for the property and strata documents (if applicable). Ensure that your financing is in place and get it in writing from your financial institution if you’re taking out a mortgage. Check with your home insurance company to ensure the property you’re wanting to purchase doesn’t have any red flags and is an insurable property. Lenders typically won’t lend if insurers won’t insure. Confirm all of the included items with the purchase, check out the neighbourhood/schools/amenities and lastly, conduct an inspection of the property if possible and confirm all details! By having all of your conditions satisfied prior to writing your offer, you’ll proceed with confidence and strength.
6) More often than not, Sellers and their agents are not allowing for other agents to personally present their Buyer’s offer and instead prefer to have all of the offers emailed/faxed to the Sellers’ agent. At the time of presentation, the Sellers’ agent will then (in the order the offers were received) go through each offer with the Sellers, outlining each offer in terms of pros and cons. Remember, the highest bid doesn’t always win. A great agent will take into account all of the aspects of an offer to help their clients determine which offer is ultimately in their best interest to accept.
So how do you make certain that your offer stands out?
7) Attach a cover letter with a photograph of you, your family etc…and try to create a connection with the seller. If your offer and one other are comparable, this could help to put the odds in your favour.
8) Send via your Realtor®, a bottle of wine, flowers, edibles to the Sellers’ agent with a card via your Realtor® ahead of offer presentation to be given to the Sellers. The key is to stand out in a positive way amongst the other offers.
9) Be early with your offer! Don’t wait until the last minute to send in your offer if at all possible to avoid, confirm that the Sellers’ agent has received your offer.
10) You have the right to your own representation! You may choose to have the Sellers’ agent represent you if you don’t have your own realtor. However, it’s to your advantage to have your own representation – especially in a multiple offer situation.
I hope upon reading this information that you’re better armed and ready to win in a multiple offer battle…situation! Being prepared for what is to come helps to make the process far more enjoyable and allows you the opportunity to fully understand what you’re committing to, thereby reducing stress and giving you the competitive advantage!
Happy House Hunting & Good luck in your multiple offer!
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