6 Tricks To Winning In A Multiple Offer Situation

The 2021 housing market is hot. When you combine the nation's post-pandemic wanderlust, the work-from-home movement, low mortgage interest rates, and record low inventory, you have a crazy seller's market. The current conditions are causing sellers to receive multiple offers on single-family homes for sale on a regular basis. In fact, one home in the Washington D.C. area recently received 88 offers in one weekend, 76 of them all cash. 

While 88 offers on a home may seem like a losing proposition, there are ways to position yourself to win in a multiple offer situation. 

1. Get Pre-Approved

Getting pre-approved with your mortgage lender is essential when the market is this fast-paced. You need to be ready to pounce when you find a house you like. 

2. Offer Above Asking Price

With houses getting multiple offers, the offer that you write with your real estate agent has to be your 'highest and best' offer. The term 'highest and best' is real estate lingo for the most you are willing to pay, even if it is above the asking price. In fact, homes are currently selling for 100K or more above the asking price. You have to go all-in if you want to win the bidding war.

3. Escalation Clause

Another trick is to add an escalation clause to your offer. This little-known clause is typically written to state that you are willing to pay $1,000 over the highest offer the seller receives, essentially guaranteeing you the highest bid. 

4. Cash Offer

Another trick that is being used frequently is to write an all-cash offer. Obviously, this is a difficult task for most home buyers. If you can swing it, however, sellers love all-cash offers because they do not have to wait for your mortgage paperwork. 

5. Waive Contingencies

In a traditional real estate offer, your agent will write in two standard contingencies to allow you to walk away from the purchase. Contingencies protect the buyer. The inspection contingency states that the buyer can walk away if they do not like the results of the home inspection and the appraisal contingency states that the buyer can walk away if the home does not appraise at or above the offer price. 

You can waive one or both of these contingencies when you are in a multiple offer situation to make your offer more appealing to the seller. 

6. Buyer Concessions

In a buyer's market, you often hear the term 'seller concessions'. Typically this means the seller helps to pay for some of the buyer's closing costs or contributes money at closing to pay for new flooring. There is no reason that you cannot try the same technique in a seller's market. 

Offering to pay for the entire year's taxes and homeowner's association fees, instead of prorating it at closing, or to pay a portion of the real estate commission, which is normally paid by the seller, could help you create the most attractive bid.

Whether you are out to buy a luxury home or a starter home, there are tricks you can use to win the house of your dreams when you are in a multiple offer situation.

For more information about single family homes for sale, contact a Real Estate Agent in your area.