This link was in JTR’s article … these tips by local Broker Kris Berg are so relevant for today’s buyers:
…Multiple offers. Aargh! I have been on both the sending and receiving side too often lately. And believe me when I tell you that “fun” doesn’t begin to describe it, unless you consider watching the hopes and dreams of a dozen first-time buyers being extinguished in casual, reply-to-all fashion to be a real laugh fest.
So what is a would-be buyer to do? There is no magic formula to getting your offer accepted in a multiple situation, of course, but there are some things you should consider in order to have a fighting chance.
1. Do NOT wait until you find your dream home to sit down with your agent and go through the contract. You won’t have time. Do a dry run before you start looking. Familiarize yourself with the forms and the process. That way, when the time comes, you will be ready to point and shoot. Speed counts.
2. Do NOT wait until you find your dream home to begin considering how nice the neighbors are, how great the local school test scores are, and how competitive the prices at the nearest dry cleaner might be. You won’t have time. While you are driving the commute route in the morning, the evening, and on weekends just to “make sure,” while you are canvassing the neighbors about barking dogs and other demographics, and while you are polling your friends and coworkers about the merits of homeownership in light of recent events in Syria, someone else has purchased the darn house.
3. Do NOT wait until you find your dream home to submit all of your documentation to a lender. New listings – the good ones – last hours, not days or weeks. And no one will look at your offer without a solid pre-approval letter tethered to it.
4. Comps, schmomps. Of course you need to understand neighborhood values and comparable sale prices. But do not forget that we are in an (albeit gradually) appreciating market. Granted, there are some external unknowns that may impact our real estate market (rising interest rates, fiscal cliffs). But, for the foreseeable future, prices are not going down. More to point, when there are many, many offers on a home, offering below asking price is not a good strategy, because the fact that this home at it’s current price and condition has attracted numerous interested buyers should tell you something about perceived market value. You aren’t going to steal it. Either you want it or you don’t.
5. A home is worth what it is worth to you. Let me explain. I recently had clients ask me what the “right” price was for a home they were interested in, what it was “worth” – this, a home that already have four offers. A home is ultimately worth what a buyer is willing to pay, and with multiple offers, it will be worth something different to different people. The “right” price in a multiple situation is the price at which you would be happy to consummate the purchase if selected but would be comfortable sleeping nights knowing you gave it your best if your aren’t. In other words, take your best shot. You are not operating from a position of uber-strength here. The whole “let’s leave a little room for negotiating” strategy is not necessarily the best strategy in multiple offer scenarios, as you may never get the chance to don your Donald Trump hat.
6. Do NOT muddy your offer with stupid stuff. If the seller says that their washer and dryer do not convey, do not write an offer asking for the washer/dryer, the pot rack, the sectional sofa and the family schnauzer. And give them stuff that doesn’t cost you anything – shorter timeframes or a larger deposit. Sometimes, it comes down to the devil being in the details.
7. Pick a good – no – a GREAT agent. I cannot emphasize enough the importance of having a seasoned, experienced agent on your side. You see, a whole lot of stuff goes on behind the scenes. A great agent is lobbying for you – groveling, even, on your behalf. They are talking to the listing agent (I know; it’s crazy) — about the seller’s expectations, wants and needs, and about the nature of the competing offers before writing the offer so that yours might have the best chance of standing out. They are following up after submittal – to confirm receipt, yes, and to answer questions and generally ensure that, worst case, you get a counter offer. It is their job to try and keep you in the game. And the offer has to be well written. As a listing agent, I am always amazed at the offers I receive that are incomplete or incorrectly filled out. I am amazed at how many offers mysteriously show up in my inbox with no warning – no call or communication from the agent prior to or after submittal. This kind of stuff puts a buyer at a disadvantage, because no listing agent wants to work with a buyer’s agent that appears to be less than competent. They are going to have to live with them for the next 30 to 45 days…
