Win in a Multiple Offer Situation

In this competitive real estate market with low inventory and buyers willing to remove some of the contingencies in their Offers there are a number of things that the buyer, and their broker, should do to increase their chances of winning.  The objective is to present to the seller with an Offer that allows the buyer the fewest possible ways for the buyer to terminate the Purchase and Sale Agreement and retain their earnest money deposit and, have the seller execute the initial Offer without requesting any changes.

Your broker should be in communication with the broker representing the seller to build rapport and gather the information to write an Offer that stands above all other Offers.  Their effective communication will give the buyer the greatest chance of winning in a multiple offer situation.

The Offer to Purchase should be completed to benefit the seller with everything properly completed including;

a.)The sellers’ choice of title and escrow companies

b.)The perfect closing date for the seller

c.)The earnest money deposit should be as high as possible.

d.)Shorten the time of the Closing Date on the transaction.

e.)Include an escalation clause the seller cannot refuse.  Escalate between $5,000 and $10,000 above all other Offers and, if there’s an All-Cash Offer, include language that doubles the escalation.

f.) Start the Offer to Purchase price above the list price.

g.)The lender should call the listing agent to assure him/her the buyer has been properly qualified

h.)Include a letter from the buyer to the seller.

i.)Consider paying all of the Title and Escrow charges for the seller.

The contingencies the buyer should consider waiving with their initial Offer to Purchase should include;

1.)Inspection Contingency – Perform a pre-inspection of the property with a qualified inspector to become comfortable waiving any additional inspections.  You may also consider a sewer inspection.

2.)Financing Contingency – The buyer should provide enough information to their lender to be fully underwritten for a loan without consideration of the appraisal of the property.  An addendum can be attached requiring permission to have an appraisal inspection.  The buyer will then come to Closing with the difference between the purchase price and the mortgage provided by the lender

3.)Appraisal Contingency – The Offer to Purchase with a financing contingency should include a Form 22AD (additional down payment) stating the buyer agrees to pay a specified dollar amount above a low appraisal if, the appraisal comes in lower than the purchase price.

4.) Resale Certificate – If this is a condominium, review the Resale Certificate and supporting documents with an attorney and if acceptable, waive the Resale Certificate.

5.)Title Contingency – The buyer and their broker can conference call with the title officer prior to submitting their Offer to review the preliminary title documents.

6.)Seller Disclosure Statement – The buyer and broker should review the Disclosure Statement in detail to identify items that may need further investigation.  If none, waive it.

7.)Paragraph W of the Offer to Purchase – Compare the information published on the MLS and additional documents to what you’ve learned during the pre-inspection.  If everything is similar, waive paragraph W.

Another thing that has enticed sellers to accept an Offer is the release earnest money to seller as non-refundable within 24 – 48 hours of reaching mutual acceptance.

Submit the Offer via email with a well written recap of the Offer within the email message and as the first page of the Offer.  Make sure the Offer is well written and all of the pages are in correct order.

If you have comments or questions about this article, please email me at smeyers@kw.com.

If you would like to read other real estate articles I’ve written, go to my web site at www.ourseattlehome.com and click on the “Articles I’ve Written” tab.

Steve Meyers is a Managing Broker at Keller Williams Realty in Seattle, Washington.  He can be reached at (206) 972-3328 or smeyers@kw.com.

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