Welcome to our Multiple Offer Market (or how to put your best offer forward and buy a home in the Denver area)
Working with a real estate professional who is experienced and who is an expert in the market can be a crucial factor in determining whether you will be on the winning or losing end of a multiple offer situation.
Get Pre-Approved not Pre-Qualified. A pre-approval is typically a little more involved but is much more desirable when it comes time to negotiate on a home. Getting a pre-approval includes a lender pulling a fact data (tri-merge) credit report, collecting pay stubs, bank statements, W-2’s, etc. and actually confirming employment statuses (referred to as a VOE or “Verification of Employment”). Most pre-approvals are as good as a mortgage commitment, and are generally only subject to a bank appraisal being done on the subject property.
Come In Strong Upfront. if the property is priced well and is expecting multiple bidders, you may not want to risk having the seller disregard your offer immediately for not being a serious contender.
1. Offer the highest price. This one is obvious.
2. Use an escalation clause in your offer. An escalation clause states that you are willing to outbid any other offers on the home by a certain amount, up to a ceiling price. The ceiling is also referred to as a “cap price” or the most you are willing to pay.
Come In Clean and With as Few Contingencies as Possible. Make your offer as clean as possible and package everything to be submitted together in a coherent way. Talk with your agent about what works for you so that you can come in with your strongest possible offer.
Meet the Seller’s Terms. For example, maybe the seller desires to have an extended closing date. The point is that sale price of the home is not always the only term that matters
Don’t Get Too Caught Up in the Bidding War. You want to come in with your best offer possible, as long as it still complies with your needs and goals.
Get in Backup Position. You’ve done everything you can. You came up to your highest price and your best terms and you still don’t get an accepted offer.
If you're one of the top contenders, the seller may offer you a backup position.
Stay Positive. It can be incredibly frustrating to buy a home in a competitive marketplace. Inventory levels are low and prices are high. It’s normal for buyers to lose out on several homes before one sticks.
Sometimes it takes a few times around to fully understand the process and what is necessary to win in a multiple-offer situation. Working with a professional who you trust and respect can help the process feel less daunting.
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