Please sir, may I buy your house?! How to win with multiple offers.
There’s plenty of easy-to-spot barometers in the real estate market and one is the rise of multiple offers. This happens when more than one buyer submits a written offer for a property at the same time and it’s become a more common occurrence in recent weeks. So for those of you forced to battle it out for that home or investment you’ve set your heart on, here’s some ideas to give yourself your best chance to stand out of the crowd.
1. Don’t let someone else buy the home for a price you’re prepared to pay. Pride, tactics and gamesmanship have their place but the market balance is swinging back toward sellers and if there is another offer on the table you might need to submit your best offer first.
2. Remember that price is only one part of the equation. Be prepared to offer a solid 5% deposit (it shows the seller you’re committed by more than just some signed papers); ask the agent what settlement timeline would best suit the sellers; talk to your bank about a cash offer (everyone who bids at auction is doing this) or at least show the agent your pre-approval letter; don’t include a special condition unless it is critical to you.
3. Use an odd amount. You need to do what other buyers won’t do so try $452,000 instead of $450,000.
4. Write a letter. So this is a common one for our American cousins and I’ll admit I haven’t seen it done in Brisbane as yet! But the idea is you tell them about yourself and your plans for the property, why you’d love to buy it and how you swear to never rip out that faux-wood panelling he installed in the rumpus himself. Apparently this tactic can work, especially if everything else is fairly equal. Over the years I have had sellers tell me they have a preferred buyer, for all sorts of reasons.
5. Be open with the agent but show them you’re no mug. Explain how you arrived at your offer and give them information and examples they can pass on to the sellers. Agents know you’ve made an emotional investment in the place by making a written offer, but eyeball them and tell them you have a limit (even if you need to gag your partner who’s ready to give up your first-born if it will end the torture of Saturday open homes).
6. Set a time limit before you will withdraw your offer and stick to it. Two to three days maximum. The seller needs to know you have other options and will walk away if they spend too long deliberating over your offer. It’s sensible negotiating but it’s also important for your sanity.
7. Be prepared to pay more than the asking price if you feel it’s worth it – remember it’s a notional starting point and in a rising market other buyers may feel it’s worth more.
Please share your ideas and comments.