Multiple offers in a down real estate market do not make sense to inexperienced buyers. When real estate was flying off the shelves in the mid 2000′s we were all accustomed to multiple offers and strong competition for the homes we hoped to purchase. We expected competition, and worked hard on our strategies to beat them. But in a market where homes lanquish on the market and buyers are able to get “insane house deals” why would anyone pay full listing price or God forbid over the asking price?
Best Deals have been above the list price
Having sold homes for over 25 years, and selling over 100 homes per year for the past 15+ years, I would tell you that I have seen a lot of real estate deals and some of the very best deals my buyers have received have been purchased above the listing price. With the high volume of foreclosed homes on the market, it is not uncommon for a bank owned property to be listed well below the true value of the home. Time and again we will see a new listing come to market, and buyers swarm the property like piranha’s after fresh meat.
Highest and Best offers
As each buyer takes a crack at the property, the listing agent sends out a proclamation of “Highest and Best Offers Due” with some random deadline and this home sale has suddenly turned into a sealed bid auction. Each buyer then measures the value of the property against their desire for a deal and submits their best offer.
What to Offer?
When competing for a property in a multiple offer situation, I recommend that buyers balance the price they would feel comfortable purchasing a home for compared to a price they are ok letting it slip away. When a buyer finds out they were outbid by $1,000 I don’t want to hear them say “I would have paid more.” No regrets in this business. You also don’t want to get caught up in the competition and submit an offer that exceeds the true value of the home or your budget.
Still an opportunity for a great deal
Not every multiple offer is an opportunity, but some are. Knowing how to navigate the multiple offer process is a skill that is not possessed by all Realtors, but an expertise that can prove invaluable. It is important to know how to properly identify the opportunities and evaluate the true value of a property. There are many additional factors that go into a contract which can make your offer more or less appealing in a multiple offer situation, so make sure that you have the right agent on your side of the transaction when looking for a home.
