On Twin Cities Live: Dealing with Multiple Offers When Buying a Home
We visited Twin Cities Live to discuss a very important topic in the current real estate climate- how to make an offer that stands out.
The reality is that homes priced well and that show show well sell quickly and often times over asking price. In April 2017, inventory was down by 19% over last April. The Twin Cities currently has a 2.2 month supply of inventory.
Below are some steps you can take as buyer to increase your chances of finding a home and getting an offer accepted:
- Work with an experienced agent who will have the time or team to get you into a listing quickly. A lot of homes are selling within a couple of days on the market, therefore you need to get into a home right away so you can make an offer quickly. Don’t wait for the weekend- many don’t make it to the weekend.
- Make sure you are pre-approved with a good, reputable lender that can be reached on evenings and weekends for pre-approval letters and questions.
- Use an escalation clause if you are in a multiple offer situation. An escalation clause means you agree to outbid any other offers by a certain price up to a certain amount. For example, your purchase price would be $4,000 over the next highest non-contingent offer up to a maximum sale price of $400,000.
- Make a good, clean offer. Low ball offers will not work in this current climate.
- Remember, sometimes a $5,000 to $10,000 difference in price can be the difference in getting or not getting the house. If this is the home you really want, over the long run of a 15 or 30 year mortgage, 5 to 10k will not make a huge difference.
- When you make an offer make sure it is as clean as possible:
- Not contingent on the sale of your home
- Don’t ask the seller to pay anything towards your closing cots
- Waive the appraisal contingency if you can
- Close on a date the is desirable for the seller
- Have a strong amount of earnest money