Four Ways to Avoid Getting Outbid

By
Mortgage and Lending with Peoples Bank

 

Competition can be stiff when multiple offers are placed on a house or condo.

There are ways to get ahead in the bidding war that will help your offer be selected.

1. Be first

If you are not working with a buyer's agent, you should be. Make sure that the agent knows that you want to jump on any appropriate properties as soon as it becomes available. Also, put a tight deadline on your offer so the listing agent can't use it to solicit other offers from interested buyers.

2. Be pre-approved

Although you likely can't pay all cash, if you have an approval from a lender saying you'll qualify for the necessary loan, you'll be in a stronger position. Because lending standards have toughened, be prepared to make at least a 20% down payment. To prove you're serious about buying, offer the seller a substantial earnest-money deposit as well - up to 3% of the purchase price.

3. Be highest

Obviously, sellers want to the the highest price possible for their property, so a generous offer will trump an all-cash one. But ask your agent to do a comparative market analysis first so you don't pay more than the market price. If you do, your deal could fall through - or you'll be asked to put up more cash - once the lender has the property appraised.

4. Be Easygoing

A recent survey done by the California Association of Realtors found that three-quarters of all sellers are putting their property on the market because of financial difficulties. While it isn't suggesting that you waive an inspection contingency, don't demand any monetary concessions, like a decorator's allowance, or help with closing costs.

Similarly, ask your agent to find out if some accommodations on time would suit the seller's needs - perhaps a quick closing date for a seller who is having trouble paying the mortgage, or conversely, a long rent-back after closing for sellers who need time to find another place to stay.

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Karen Crowson
Alain Pinel Realtors, Pleasanton, CA - Livermore, CA
Livermore Wine Country Homes

All good suggestions John.  And if it's a short sale, I like to make sure the buyer's put that earnest money into escrow when the seller signs, not just when the bank approves.  It strengthens their comittment to the property, and the seller's confidence in that buyer.

Jun 24, 2011 01:38 AM #1
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Michelle Carr-Crowe-Selling Silicon Valley Homes in Top Schools San Jose, Cupertino, Saratoga, Palo Alto-Just Call 408-252-8900
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Great advice for buyers-if only they would take it all, including "be highest."

Jun 24, 2011 01:38 AM #2
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