Is cash king in every multiple offer situation? With the new housing market, limited inventory and bountiful buyers, multiple offers have become commonplace and it seems that there is always someone with cash that takes the prize. Especially for first time home buyers these cash buyers are making the process a bit more difficult. Sellers want to see a solid offer so they know that their home will close as planned and nothing will “fall apart” to ruin the deal, which makes sellers a bit partial towards cash offers.
If you are submitting a financed offer there are some things you can do to make your offer more attractive to the sellers and maybe beat out the cash offer. Make sure you are offering your highest and best offer, put as much as you can in the down payment on your loan, this shows the sellers that you have some money and are serious. Submit a nice earnest money check with the offer which also shows you are serious about buying the house. Offer the sellers ample proof that you will qualify for the mortgage and offer to give them a financing approval by a certain date prior to closing.
Cash is a tough competitor, but it can also be beat. Talk to your Realtor to find out your best strategy if you are in a multiple offer situation and are competing against cash buyers.
What are buyers looking for in a home? Do males and females look for different features? Does age play a factor? What is most important, a finished basement, granite counter tops, an in-law apartment, a garage? The National Association of Realtors studied buyers who purchased homes between 2010 and 2012 to see what region, demographic and household composition have to do with home buyer preferences. The results can be found in the 2013 Profile of Buyers’ Home Feature Preferences pdf. Click here to see the pdf.
As I have said often this year, housing inventory is very low and buyers are out in force creating multiple offer situations on many homes. What can you as a buyer do to help make sure the seller chooses your offer? Obviously, there are many factors and the ultimate decision is the seller’s but there are a few things you should know up front to make your offer more competitive and you will also want to discuss the best strategy with your realtor.
One question most buyers that have written a purchase agreement are asking these days is what is the offer response time from the sellers. The past few years when buyers were scarce, sellers were responding rather quickly if they got an offer but these days with so many buyers and showings sellers are not so apt to rush into anything. Normally the seller will get the buyers a response in about 24 hrs. Right now if there are a lot of showings they may hold off to see if they can get multiple offers. You can put a response time on your offer, but in that case you need to be ready to say forget that house and move on if the sellers choose not to respond in your time frame.
If you are looking at bank owned properties they often will wait days if not up to a week to see how many offers they can get. Generally at some point they will ask for the highest and best offer and then make a decision.
It may not seem fair to the buyers, but the sellers are in control right now with so many buyers and so few homes for sale. The best plan is to make a good solid first offer, be flexible if there are multiple offers, exercise patience and consult with your Realtor for your best plan of action.