Peak season brings multiple offers on the best homes. When leaf season fills the North Georgia mountains with buyers, the most appealing properties, the ones that are well priced, well kept and well located, can draw several offers within days of hitting the market. If you find yourself competing for a home you love, the strength of your offer matters. The good news is that price is not the only lever. Larger earnest money, flexible dates, pre-approval and shorter contingencies within reason can all make your offer stand out. Here is how to approach a multiple-offer situation with a clear head.
How Multiple-Offer Situations Work
When a seller receives more than one offer, they compare them as a whole, not just on price. A seller wants confidence that the buyer can close, on a timeline that works, with as few obstacles as possible. Depending on the situation, a seller might accept the strongest offer outright, ask buyers for their highest and best offers by a deadline or counter one or more buyers.
Understanding what the seller values most helps you shape an offer that appeals to them. Your agent can often learn useful details from the listing agent, such as preferred closing dates or whether the seller needs time to move.
Ways to Strengthen Your Offer
Larger earnest money
Earnest money is a deposit that shows your commitment to the purchase. It is typically held in escrow and applied toward your costs at closing. A larger earnest money deposit signals that you are serious and financially prepared. Understand the terms of your contract, though, including when earnest money could be at risk if you do not close.
Flexible dates
Timing can matter as much as money to some sellers. A seller who needs to close quickly, or who needs a few extra weeks to move, will appreciate a buyer who accommodates them. Ask what closing date the seller prefers and offer flexibility if you can. Some buyers also offer the seller a short period after closing to move out, if both sides agree and the lender allows it.
Pre-approval
A pre-approval letter from a lender shows the seller that a lender has reviewed your finances and is prepared to lend, subject to the property. It is the minimum for a competitive offer. A strong, recent pre-approval from a responsive lender can give a seller confidence that your financing will hold up. If you are paying cash, provide proof of funds.
Shorter contingencies within reason
Contingencies and due diligence periods protect buyers, but long ones can make an offer less attractive. Shortening them, within reason, can help. For example, you might schedule inspectors in advance so you can complete inspections in less time. The key phrase is “within reason.” Do not give up protections you truly need.
Protections Not to Give Up Lightly
In a competitive situation, it can be tempting to waive everything. That can be risky, especially in the mountains, where properties have wells, septic systems, decks, easements and other features that need careful review.
- Inspection: know what you are buying, especially with older homes and cabins.
- Septic and well checks: these systems can be expensive to repair or replace.
- Survey and title review: boundaries and easements matter on mountain land.
- Financing: make sure your loan is solid before shortening financing protections.
- Appraisal: if you consider an appraisal gap commitment, know exactly how much extra cash you could cover.
Talk through each one with your agent, and if you have questions about contract terms, consider speaking with a real estate attorney.
Other Ways to Stand Out
- A clean offer. Keep terms simple and clear, without unnecessary requests.
- Quick response. Be ready to sign and respond promptly.
- Fewer extras. Avoid asking for furniture or other items unless they matter to you.
- Escalation clauses. In some situations, an escalation clause can automatically raise your offer above competing offers up to a limit. These have pros and cons; discuss them with your agent before using one.
- A strong first offer. In a competitive situation, you may not get a second chance.
Deciding How Far to Go
Before you write an offer, decide your limit. Think about:
- The most you are comfortable paying, not just the most a lender will approve.
- How the home compares to recent sales nearby.
- Whether the home is likely to appraise at your price.
- How much extra cash you could cover if it does not.
- How you would feel if you lost the home to a slightly higher offer.
Setting your limit ahead of time helps you avoid making a decision under pressure that you might regret later.
If You Do Not Win
Losing out on a home you love is disappointing, but it happens to many buyers during peak season. Ask your agent to let the listing agent know you are still interested in case the accepted offer falls through. Review what you learned, adjust your strategy and keep looking. The right home may be the next one to come on the market.
What to Do Before Your Next Offer
- Get a fresh pre-approval letter or proof of funds.
- Decide how much earnest money you can comfortably put down.
- Line up inspectors so you can move quickly.
- Set your price limit in advance.
- Talk with Sherry about how to structure a strong, sensible offer.
