Competing in a Multiple Offer Market
There is no doubt that in today’s real estate market you can find some excellent buying opportunities. Many experts believe that we are in fact at the bottom of this real estate market, and that we will start to see another shift in appreciation very soon. There has been a phenomenon occurring, which is multiple offers on a single property. This is indicative of a very hot market.
In today’s market there is often a third party that will be negotiating the selling price which is the bank. This is true in both short sales and foreclosure properties. With multiple offers the seller or bank has their pick of what offer to accept, and is widely based on two factors price and terms. The seller wants to get the best price and terms, even in a market where there are many properties for sale and consumers believe it is a buyers market. If you want to compete in a multiple offer situation there are a few things that you need to know.
The seller is going to accept terms which meet their own needs, so keep contingencies to a minimum. Contingencies like selling your current home or financing play a big role in your offer being accepted or rejected.
Another thing to consider is your offer price. In today’s real estate market the bank owned properties are typically priced at the bank’s “bottom line” and there is little room for negotiation. If you and your real estate professional research previous sale prices of that same property you will find that you are getting a great deal, sometimes as much as 40 percent less than what that same property was four years ago. Trying to get another 20 percent off the list price will result in a sale of that home, but just not to you.
Be realistic with your offer price and your terms. Getting pre-qualified for a loan, or having a cash offer is more favorable than having a finance contingency in your offer. In many situations you will need to be pre-qualified to even make an offer on a property. Additionally, many real estate professionals are finding that an unrealistic offer based on price will be rejected. You need to put yourself in the banks position. If you have a property that you have a loan on for $200,000, but the property is only worth $ 160,000 today would you accept an offer of $ 150,000? In this scenario the bank would take another $10,000 loss on this property if they accept that offer, so they may wait for a realistic offer to come in. Sometimes with properties where the owner is still living in it but needs to sell, a quicker closing date may be advantageous and give you an additional edge. This strategy may even work with some of the short sales.
As a buyer, you need to determine how bad you want the property. Multiple offers are a reality of today’s market and you need to select a real estate professional who can navigate you through writing up an offer that will be accepted.
Jason M. Jakus is a licensed realtor for Leisure American Realty, a full service Real Estate and Property Management company serving the beaches and surrounding areas of Lee County. Their office is located at 2450 Estero Blvd., Fort Myers Beach FL 33931. For more information on this or any other real estate or property management subject contact Jason at 239.463.3178 or email RealtyInfo@LeisureAmerican.com.”