Multiple Offers: 6 Ways to Beat Out the Competition
15 offers!!! WHY!!??
In a normal (read: typical, healthy) real estate market there is 4-6 months of inventory, or homes to purchase. In our Charlotte region, there is currently ONE MONTH of inventory!
With historically low interest rates and a huge pool of buyers, there is high competition for the very low inventory.
Frustration is normal with buying a home. It's a rollercoaster of emotions because it is one of the largest financial investments you'll make in your lifetime! But, there are ways to set yourself up for success:
1) Find a lender who will "FULLY UNDERWRITE" your loan up front. That means that the lender can process nearly all of your financial information very early in the process, so by the time you submit an offer on a house, it's nearly a done deal. This level of loan security makes sellers feel very at ease. You can beat out higher offers this way! My buyers do!
2) Money matters: In North Carolina, we have Due Diligence and Earnest Money funds which are submitted after acceptance of an offer. This is your "good faith" money.
In a traditional scenario, you'd put up 1% of the purchase price of the home. In a multiple offers market, consider offering a total of 2% or 3% of the purchase price of the home. This is money you risk if you don't close. But this money is leverage, and seller-assurance that you will be motivated to close on the home. Remember: This initial money gets credited back to you at closing. :-)
3) Shorter inspection period: If you have a conventional loan, and the house is in excellent condition, you may opt for a shorter inspection period. This provides the seller with some comfort that you are committed to the house, and you won't make them wait 3 weeks to see if you cancel the contract.
Note for VA and FHA buyers, you typically can't do a short inspection period because the appraisal scheduling may take time, and you need to ensure you can negotiate repairs as needed.
4) What about a letter to the sellers?
There are two thoughts on this: some say it is a violation of fair housing, because if you include a picture it may sway the sellers based on your personal demographics.
Some say multiple offers are a blood sport and you have to use every tool at hand to achieve your goals. If you DO craft a letter, pull those heartstrings! Humanize yourself, make the sellers feel good about you, and about their house.