We are still experiencing multiple offers in the Orlando real estate market. There is still a lack of inventory in the Downtown Orlando real estate market specifically (good condition and well priced inventory that is!). In times like these, I often hear buyers say “I don’t want to get into a bidding war”. This sort of baffles me. Wouldn’t you want to at least try to secure a contract on a house that you like and fits your needs? It’s not really a bidding war if you’re not in an auction where you can “one up” the other person.
In a real estate transaction, when there is a multiple offer situation you aren’t really bidding on the home. You simply make a solid offer and you either have the best offer for that particular seller or you don’t. In these situations, you just need to make your highest and best offer so you know you gave it your best shot. But if the seller decides to go with another buyer, well you just move on to the next option. Keep your emotions in check; it is not your “home” until you have the keys.
So let’s walk through the steps of making an offer on a property that has multiple offers.
- Evaluate the market in the area to determine a fair value for the home
- It is important that you have a skilled agent that can help you understand if the home is over value or in some situations under value. If a home is priced right and there are multiple offers, there is a very high likelihood that the property will sell for over asking price.
- Ask yourself if you’re willing to pay fair market value for this home. As long as there are comparable homes to support that price, you’re not “overpaying”. Many people have a fear of overpaying, but if 10 other buyers are willing to offer at or above asking price than the “fair market value” is actually greater than the asking price!
- Make a clean offer
- Again you need a skilled agent to assist you with this, but basically you want an offer with few contingencies and little to no concessions.
- A great offer contains no concessions or has factored those into the price.
- If you need closing cost assistance than consider this as you decide on a sales price. You may have to offer a higher price and wrap the closing costs into the offer price.
- Keep in mind the home still has to appraise if you are using a loan; so you can offer more but if it doesn’t appraise you will have re-negotiate with the seller and they may not be willing or able to contribute to your closing costs at that time.
- Have a quick inspection period and closing date. “Quick” is typically 7-10 days for inspections and a 30 day closing. For a cash transaction you can close in about two weeks.
- Put down a reasonable escrow deposit.
- The escrow deposit is a good faith deposit on the house. It is negotiable as all of the offer terms are, but make sure it represents how serious you are. As a cash buyer you can expect to put down a much greater escrow deposit.
- Get pre-approved if you are only pre-qualified for a loan and present that letter with your offer. Or if you are paying cash have a Proof of Funds presented with the offer.
- Pre-qualification means the lender has checked your credit and asked you some questions. A pre-approval means they have verified your income and assets.
- As a seller wouldn’t you want to know that everything has been confirmed?
- To go one step further, you could get a loan approval. There are lenders that can provide a commitment contingent upon the property appraisal. This says to the seller that you are serious about purchasing a home and that the lender has fully approved you as a buyer. *this means less contingencies that the seller has to worry about*
No matter what price range or market you are in, there are sometimes multiple offer situations. The best thing to do is take the emotions out of the equation. Determine the best possible offer that you feel comfortable with and make that offer. Someone else may offer more, but there’s no way to know what someone else is going to offer. With a great agent on your side, you’ll have a strong offer and be in contention on these difficult deals.
Thinking of Buying a home in Downtown Orlando? We think you should love where you live. Get started today by calling us at 407-494-2820 or visit http://www.heartorlandohome.com/