HOW TO WIN IN A MULTIPLE OFFER SITUATION
Get Pre-Approved, Not Pre-Qualified
It’s very important to understand the difference between being pre-approved and pre-qualified for a mortgage.
For pre-qualification, lenders will look at the overall financial picture that is provided by the buyer and the buyers credit score. Once they have done this, they will provide you with a pre-qualification letter subject to verification of the information provided. What could go wrong?
Pre-approvals are usually a little more involved but more desirable when negotiating a deal on a new home. A pre-approval is like a mortgage commitment and is usually only subject to a bank appraisal being done on the property. Being preapproved when in a multiple offer situation can give you a huge advantage as to which offer the seller chooses.
Have Fewer or No Conditions
While it is not recommended in most cases to waive the subject to inspection, doing so will be more appealing to the seller. Lately, it is not uncommon to see buyers coming to a showing or even an open house with their property inspector in tow. If you can, having the inspection done prior to making an offer will give you peace of mind that you are not purchasing a home in need of thousands of dollars of repairs.
When considering a strata property, have your realtor request the strata docs, property disclosure statement, depreciation report, et al, prior to making an offer or even before you see the property. Any issues that would deter you from purchasing the property will also save you time as you may decide to not even view the home. And once again, reviewing the property documentation prior to submitting your offer gives you one less condition on your offer.
Work with the Sellers
Have your agent find out the seller’s plans. Do they need a quick transaction or do they need some time and want to rent back? Being as flexible as possible will make your offer more enticing to the seller.
Show up Ready
Along with your offer, have your deposit check, signed title and PDS ready. Consider a deposit larger than the standard 5% to show just how serious you are about purchasing the property.
Make a Strong Offer
Don’t low ball! Expecting to win in a multiple offer situation while low balling is misguided. If you are in love with a home and there are multiple offers, you will have only one chance at getting that home. Have your Realtor evaluate the property under the conditions of the current market. Ask yourself, if I lose this home over $5,000, $10,0000 or more, or less, will I be okay with that?
Unfortunately, in a multiple offer situation, you don’t usually have the opportunity to make an offer and then counter-offer back and forth. You’ve got one shot, so go in strong. Also, keep in mind that just because you put in your best number does not guarantee that someone else won't go higher than you. You many have to try a few times before you get an accepted offer.
Hire the Right Agent
Losing a home in a multiple offer situation can be frustrating and heartbreaking. Make sure that the agent who is representing you has experience with multiple offer situations and follow their guidance to help you successfully negotiate a win.
