Things to know in a multiple-offer homebuying situation
The housing market remains competitive, so buyers should prepare to be one of several suitors for a home.
I’m not much for reality television. However, shows where groups of guys and girls compete to win the affection of one bachelor or bachelorette catch my attention. I am fascinated at the lengths these hopefuls will go in order to make an impression and receive the final rose.
It’s not so different in today’s housing market. The market is as competitive as it has ever been, and as a buyer, you could find yourself one among many suitors for a home.
To win in a multiple-offer situation, there are many things to consider. This week I’ll share things to understand before making an offer and will follow up next week with multiple-offer strategies.
Keep calm. Remain patient, don’t panic and don’t be discouraged if you miss out on the home of your dreams. Deep in the process of searching for a home, you may not see that the house you can’t live without is actually a house you don’t want to live with. Once I had buyers lose out on a house in a multiple-offer situation, only to find out the house they absolutely had to have was infested with brown recluse spiders.
Get preapproved with a lender. Make sure the lender can generate a preapproval letter so that it can be submitted with the offer. Sellers want to make sure the buyer can make it to the closing table.
Understand pricing. You and your Realtor should review the pricing of homes that have sold in the area within the last six months. Look at the features of those homes and compare them to the features of the home you’re considering purchasing. In a multiple-offer situation, it’s easy to get carried away and offer above what the comps show you should. It is certainly your prerogative to knowingly offer more for a home than the comps show it’s worth, but remember, a home purchase is a significant investment, so make sure you consider how long you plan to live in the home. If our market experiences another slowdown, will you be able to regain the equity you may lose?
Finally, if you require a loan to purchase a home, don’t be surprised if you compete with other buyers who have cash at the ready. It’s no guarantee a cash offer will trump all others, though, so it’s important to make sure your offer is as attractive as possible to the seller.
Remember, be patient and know that the right home will come along in time.
Denise Creswell is president of the Greater Nashville Association of Realtors. A Realtor is a member of the National Association of Realtors who subscribes to its strict Code of Ethics. Contact her at 615-473-1663 or denise@denisecreswell.com.