Buying a house with Multiple Offers
How to buy a home in Wasilla with Multiple Offers
Today's market is tough when it comes to winning in a multiple offer situation. With low inventory and high demand it is likely you will find yourself in a multiple offers situation, especially on new listings that just hit the market. Here are a few tips on how to make your offer stand out.
Tip 1- Prequalified
Make sure that your financing is lined up and you have a prequalification letter in hand. Even if your offer is higher than the next one, your offer may not be compelling to a seller if your financial ability is not verified upfront.
Tip 2- Earnest Money
Providing a large earnest money deposit may demonstrate to the seller how serious you are in completing the purchase and it will make your offer stand out. Our MLS contracts in Alaska have several provisions for buyers to have thier earnest money returned to them in the event new information about the property is disclosed or uncovered. However, if found in default, you could lose your earnest money.
Tip 3- Escalation Clause
Escalation clauses are commonly used in multiple offers. The clause would describe what you are willing to pay over another competing offer. However, understand that the seller now knows what you are willing to pay and may just send you a counter offer based on your highest number in the escalation clause. These clauses often include terms that state the seller must provide evidence of a competing offer. The seller does not have to provide documentation on the competing offer. In the end, it is what both parties agree to.
An example of an escalation clause would be something like this, " Sales price to be $1,000 higher than any competing offer up to a maximum of $ Max Offer, seller to provide verifiable evidence of competing offer." Quite often we see escalation clauses with $1,000 being used as an amount over the next offer. I can tell you that often $1,000 is not a compelling number. Be aware that there are many other factors that weigh in to the final decision, where $1,000 is not enough to make it that much better than another offer. If you are going to use an escalation clause, consider offering a number higher than $1,000.
Tip 4- Ask the Sellers Agent
Have your realtor call the listing agent and ask if there is anything special that the seller is looking for. For example, some sellers may want an extend closing or do a lease back. A lease back is where you would close on the house and then the seller would rent the house back from you for a short period of time. By asking some questions, you may be able to find out what's important to the seller, other than the highest price, to make your offer stand out.
Tip 5- Give us call
All these tips come from decades of experience and we have plenty more to share. We would love to be able to give you all of our best tips, but we need to save some for our clients. If you are interested in speaking with us about buying or selling please give us call. My cell number is 907-232-6711 or call Jacque at 907-841-7363.