Ask An Agent: How Can I "Win" a Property That Has Multiple Offers?

• July 29th 2009

by Mark Wellborn

In this week’s installment of Ask An Agent, a reader inquires about what she can do to help her chances of being chosen as the “winner” when a property receives numerous comparable offers. Joel Nelson of Keller Williams offers up some insight.

Question: I have a number of friends who are in the market for a new home, and I am hearing that if a property is reasonably priced, it will undoubtedly receive multiple offers.

I was wondering what a prospective buyer can do to help his/her chances of being chosen as the “winner” when a property receives numerous offers. Does the decision as to who will be chosen as the buyer hinge on price alone, or are there other factors that will give you a leg up?

Answer: Your friends are very accurately describing the up-to-the-minute state of the DC home market. Real estate professionals work hard with sellers to properly price and market their homes to receive maximum exposure at “launch.” If we do our job properly, and are fortunate enough in the timing to receive two or more competing offers, we review the following factors, in addition to price:

• Down Payment – A down payment of 20% or more is very attractive these days. Lending banks and appraisers are dealing with declining markets in many areas, and can be incredulous when the comparable sale data demonstrates that Washington DC is not seeing home values decline. When the loan to value is 90% or more, it can lead the loan underwriter (often sitting in a completely different region) to inaccurately scrutinize the appraiser’s valuation at sales price, which can threaten or delay the transaction.

• The Buyer’s Demonstrated Financial Strength (Income, Assets) – Because financial strength is reassuring to the lending institution, it is also reassuring to the seller.

• Length of Home Inspection Contingency – We counsel our sellers to welcome buyers’ home inspections, to ensure all parties have a very clear picture of the condition of the asset being exchanged before settlement. However, inspection contingency periods that stretch longer than 7-9 days can drag out the time during which a buyer can get cold feet. Also, an extended contingency period of that kind can put the seller in a kind of “limbo” during which they might not be able to move forward with the search for their next home or make moving arrangements. In most cases, it is reasonable for buyers to complete the inspection and identify any repair requests within a prompt window of time.

• Presence of Other Contingencies – Financing and appraisal contingencies are a natural and healthy part of the process now, and a reasonable time to complete them (e.g. 14-20 days) is to be expected. Other contingencies (for sale of existing home, etc.) can create an unpredictable risk factor for the seller.

• Timing – Every seller has a different preference, but if the buyer agent can talk with the listing agent to determine the seller’s ideal settlement timing, offering that timing can be worth several thousand dollars of cash proceeds depending on the seller’s carrying costs, moving logistics, etc.

Of course, there are other subtle nuances that help a seller evaluate offers with the help of their agent. However, if you view this short list of terms from the perspective of the seller, your buyer agent can fine tune the offer that will be most attractive without necessarily exceeding your purchase budget.

This article originally published at https://dc.urbanturf.com/articles/blog/ask_an_agent_how_can_i_win_a_property_that_has_multiple_offers/1182.