How to Navigate Multiple Offers

Multiple Offers

In a largely competitive real estate market like Rochester, MN, it’s likely you’ll encounter a multiple offer situation in your search for a new place to call home. No matter which side of the table you’re on, navigating multiple offers can be difficult. Here’s our guide for what to expect in multiple offer negotiations from all sides.

Information for the Seller:

Congratulations! People are lining out the door to buy the home you’ve loved, grown in and cared for over the years. But beyond the initial excitement, there are risks to consider. In a multiple offer situation, the market is hot and pressure is on the buyer to put an offer on a house they like. Some eager buyers might make a hasty offer on a house they think they love, and they could be at risk for backing out at the last minute. By the time this happens, other buyers who are interested have likely moved on to other options, leaving you empty-handed.

Although it’s impossible to plan for this situation, there are a few things for a seller to look for in an offer that could indicate a buyer who is serious about buying your home.

  • Stable financing – Conventional loans are a little harder to come by than FHA loans, with stricter credit score and down payment requirements. Buyers with conventional loans might be less likely to pull out of a deal due to financing issues.
  • Pre-approval – A buyer who has been pre-approved for a mortgage is serious about buying. This means a loan provider has pulled credit history and examined the finances of the potential buyer, and determined the buyer is fiscally ready for the purchase of a home.
  • Avoid personal touches – Some buyers include personal letters or photos in their offers in an effort to stand out from the crowd. We advise buyers and sellers alike to stay away from considering or including any emotional ties in a home offer transaction. As a seller considering multiple offers, stick instead to objective points of the offer such as: a price close to or above your asking price; selected closing date that works best for you; amount of earnest money; or if the buyer is willing to forego a home inspection.

Choosing the best offer isn’t always easy, but a little extra work in evaluating them side-by-side will help you select the one that works best for you.

Information for the Buyer:

Some buyers light up when they walk into their to-be home. It’s everything they could want and more at the right price! You and your agent instantly call the seller with an offer, and realize your dream home already has multiple offers. As a buyer, how you feel at this make-or-break moment is a good indicator of how serious you are about this specific house. If a buyer is hesitant to compete with multiple offers, it’s often a sign that the house might not have been a good match anyway – and that’s okay.

Navigating multiple offers as a buyer can be daunting. Win or lose, competing with multiple offers can be a learning experience. Although it can be heartbreaking, it’s also a wake-up call to recognize the speed they must be ready to move at to commit in a competitive market. The good news is as a buyer, more homes will always come on the market. But once you find “the one,” you must be ready to act quickly.

For buyers who are just entering the market or those who have lost out on a few properties, here are some tips to put your best foot forward in a multiple offer situation:

  • Make a strong first offer – In a competitive market, sellers presented with multiple offers can afford to be choosy. As a buyer, come in strong from the start to make sure the seller knows you’re serious about buying the property.
  • Be flexible with the seller’s needs – To a seller, the closing date is often as important as the price point when considering an offer. Does the seller want a long escrow period because their next home won’t be ready yet? Or do they want to close quickly because they have already closed on a new property? If you’re able to be flexible with these aspects, meeting the seller’s needs will make your offer that much more attractive.
  • Consider an offer not contingent on a home inspection – Hear us out on this one. As a buyer, you want to fully understand the very important purchase you’re considering. While we’ll never advise to forego a home inspection completely, consider doing a home inspection without making the offer contingent upon it. Often, sellers will jump at the chance to accept an offer with as few contingencies as possible. This could be an advantage to a potential buyer in a competitive market. Our advice to buyers interested in this option is to still schedule and attend a home inspection and take diligent notes, even if your offer isn’t contingent upon the inspection.

It can be stressful to buy a home in a competitive market. Working with a real estate professional you trust can help you stay positive and confident.

From the Agent’s Point of View:

If you think about it, buying or selling a home is not something most families go through every day, or even every five years! The home transaction process is often a confusing one for both buyers and sellers alike. It is the agent’s responsibility to coach the client through the possibility of multiple offer situations: what to expect, how to handle possible scenarios and probable outcomes.

As real estate professionals, our job is to represent each of our clients with honesty, professionalism and integrity in every transaction. No matter if we represent the buyer or seller, multiple offer situations can get intense! The best way to navigate complicated situations is through effective communication between all parties, and we promise to do our very best in facilitating these conversations in your best interest.

In any small-to-medium sized market (Rochester, MN included), it’s not uncommon for one agent or brokerage to represent both the buyer and seller – a situation known as dual agency. Acting as a dual agent is not easy, and as a realtor, it is our obligation to keep lines as clean, clear and professional as possible. There can be pros and cons to dual agency, and as a client wanting to learn more we advise having an open and honest conversation with your realtor about what dual agency might look like for you.

If you are considering buying or selling your home, we’d love to help you get started. Contact us today.

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