When you find the home of your dreams and make the decision to make an offer, the last thing you want is to discover that you’re in competition with another buyer for that home. But it happens, especially during the busy spring market season. Despite what your thermometer is telling you, the spring market for real estate has arrived. Traditionally, we see the most market activity—new listing and homes under contract—during the months of February, March, April and May than any other four-month period in a given year. In 2016, 290 homes went under contract during the spring season in Elmhurst, accounting for 42% of all homes going under contract for the entire year. When a fast-moving, competitive market occurs at the same time as low inventory (Elmhurst’s inventory is currently at 4.4 months, the lowest it has been since the market recovered) it is not uncommon for a buyer to be involved in a multiple-offer scenario.
Defining Multiple Offers
- Multiple offers occur when a seller has received offers on their home from two or more unique buyers at or near the same time.
The seller has several options on how to proceed including accepting an offer, negotiating or rejecting all offers.
One common response for a seller is to request a “highest and best” offer from all parties. Highest and best is the highest price the buyer is willing to pay along with the best terms (earnest money, closing date removal of contingencies) they are willing to offer.
Preparing for the Multiple Offer Scenario
- Work with a professional Realtor who will look out for your best interests and keep their pulse on the market.
- Start your search months before you plan to move. It is not uncommon for multiple offers to occur on new listings that are aggressively priced. If you’ve done your homework, you’ll be able to recognize such a property and act faster than your competition.
- Choose your team wisely. Along with your real estate pro, have your preapproval from your lender and have your real estate attorney, inspector and loan officer on call. If you are in a multiple offer situation, you’ll rely on your team from offer-writing through closing.
- Have a plan to leave work early, take a long lunch or have childcare on alert. When your Realtor tells you a great property hit the market, be ready to drop everything to go see it.
- Craft a perfect offer. Based on the market trends and recent comps, present the seller the highest price you are willing to pay. Be ready to consult with your advisors (your Realtor, lender, attorney and friends and family) about the benefits and risks associated with negotiating terms. Terms (the other components of your offer) include increasing earnest money, being flexible on the closing date, letting a seller keep certain fixtures or keepsakes, or removing the protection of a mortgage loan contingency along with numerous other factors.
All signs point to a strong real estate market in 2017. If you find yourself ready to put an offer in for your dream house, you may find that you’re not the only one dreaming of that home. Be in for the win by being prepared and working with your team of professionals. Contact us today to learn more.