Monday, April 2, 2012
Secrets to Winning in a Multiple Offer Bidding War
As you search around the streets, you may notice there are not as many homes up For Sale as usual. In some parts of San Diego you are right. For example, in Santee the total number of homes listed during the first quarter of the year declined 4%, compared to last year.
According to the California Association of Realtors, the number of homes for sale has been declining for the past 8 months. As the number of homes decline, the law of supply and demand kicks in leading to more multiple offers.
So what are the secrets to winning a bid on a home where there are multiple offers?
1. Use a Realtor®. Many think they can find properties online and don’t need help. But in truth, many of the property websites that consumers use have a 48-72 hour delay. A Realtor can locate new listings and represent you in the purchase of a home.
2. Don’t delay. When you find the right home, there will be other buyers out there feeling the same thing. Get your complete offer in as soon as possible. The offer must include a loan preapproval and the Proof of Funds.
3. Don’t low ball the property. Using the comparable properties prices, determine the fair market value and give your highest and best offer. If you are buying the home with a loan, the home will be appraised to make sure that you are not paying too much for the home. When the market prices are climbing, you can offer a little more than the comps. However, if you are too high, you may have to renegotiate the difference between the appraisal and your offer.
4. Factor in Closing Costs. If you need to have closing costs, you are best to bring up the price up to make up the difference. So at the end of the day, the seller still nets a fair price.
5. Include a letter explaining why you would make a better buyer. Some people include mini biographies with family or individual photos. Any information that might emotionally influence the seller to accept your offer over another will help your position.
With the use of these tips, hopefully you can succeed in a more competitive market and win the home of your dreams.
ABR, CRS, e-Pro, GRI, SFR
Coldwell Banker Residential Brokerage