How to Win a Multiple Offer Situation

How should you deal with a multiple offer situation? For starters, don’t just focus on the offer price.

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In our area, we’ve only got about 1.5 months worth of housing inventory. That means that if no other homes were to come on the market, we would be out of homes to sell in just a month and a half. 

This is an extremely low number and has led to an increase in multiple offer situations. I’ve got some tips for you on how to determine which offer is the best one to take in this situation.

The first thing you want to be aware of is that the highest offer isn’t always necessarily the best one. We want you to get the highest number of offers possible, but we also want your home to get through the escrow process and close. One way we bulletproof your transaction is by looking at appraisal contingencies, which cause one in four deals to fall apart.

Appraisal contingencies can come back to bite you.

Let’s say you have a $300,000 house and receive multiple offers on it once it’s listed. Let’s say one of those offers is for $1 million. If it’s a cash offer, that’s a no brainer. However, if the buyer has financing, the offer means little. Most of the time, the appraisal contingency protects the buyer. Whatever the appraisal value comes in at, that’s where they will make their counteroffer. Most of the time, they have no intention of paying that high price. They just use it to catch your attention and get you to accept their offer. An offer slightly above asking price with no appraisal contingency is usually a better option.

We approach each person who makes an offer in these situations and ask them if they are willing to waive their appraisal contingency or if they would be able to bring additional money to closing in case of a low appraisal to cover the difference.

There are a number of things you can do to strengthen the likelihood of getting a good, strong offer. If you have any questions for me or you’re thinking about buying or selling anytime soon, give me a call or send me an email. I look forward to hearing from you soon.