Its gut wrenching when you’re client falls in love with a home, you submit a contract, and then hear the words “multiple offer” and “best and highest.” The Seller is in control. So how do you proceed, and what are the 5 things that you and your client can do to give your offer the best consideration in the process?
1. Reach out to the agent and ask. The Listing agent won’t tell you the other offer, (usually) but you can look for clues to help guide you. Is there anything that is important to the seller other than price? What is most important? What is an ideal closing date?
2. Have your clients write a letter. The letter should be honest and from the heart. Have your clients describe a little about themselves and why they want to live in this home and in this neighborhood. How will the new home affect their lives positively?
3. Get a Pre-Qualification letter. This shows that you are ahead of the game and that your offer is serious. Make sure it is on letterhead.
4. Shorten the contingencies. The seller wants to close contingencies (buyer outs) as soon as possible. Never give up the right to an inspection, but you can probably get an inspection done earlier and release your objection. Same goes for the loan and property insurance dates. The earlier that all contingencies can be out of the way for the seller, the more confident the seller will be.
5. Write your best offer. After providing a comparative market analysis to my buyers, I suggest that they consider an offer that they will feel comfortable losing the house with. In other words, if the seller selects another contract just a few hundred dollars over yours, will your buyers feel remorse? If they are unsure, your clients could pay for some of the minor items such as improvement location certificate, owners extended coverage and closing services fees.
This process is tough for the client as well as the agent. I pride myself in representing my clients to the best of my abilities, and having someone overpay for a home is a scary reality in these situations. I always advise that there will be other homes that will meet many of their needs in time. I also remind them that the home buying process should not only be guided by the heart, but also should be a solid business decision. Ultimately, your client needs to be prepared to accept the result of the sellers’ decision and be ready to move forward in the process more educated about the market!