OOHF! You’ve stumbled upon the home of your dreams! Your heart is beating fast, your brain is racing… because you’ve somehow FOUND it: the home you’ve been searching for! Suddenly you are protective of it, and want other buyers to stay away, or find something wrong with it, so you can present your offer solo, without the pressure and competition of those OTHER buyers!
Love at First Sight
Perhaps you first came across it online, watching the eleven o’clock news out of one eye, while doing your obsessive evening MLS check… and BAM!… there it was! With an Open House on Sunday, and you had to WAIT to get in and see it. Along with 30+ other groups of Arlington’s First Time Home Buyers.
Along Comes Sunday…
You arrive early. You scope out the commute, the neighborhood, the outside of the house, and finally when the door is unlocked you enter Paradise! It’s everything you imagined, and more. You’re pleasantly surprised, you actually hurry from room to room, fearing a disappointment around each corner, while hoping for perfection. And it IS PERFECT. It’s practically shouting your name from every corner. Your bed here, your couch there, your computer and music here, your mom’s picture there… your car in the garage, and your grill on the back deck. YES, this is the one!
Not so Fast, Pardner.
The rooms are filling with people, several with Buyers Agents, (which you’ve managed to avoid because you enjoy being independent, and didn’t want to waste anyone’s time)… and suddenly you realize you are unprepared. This sinking feeling is compounded by realizing that your six months old pre-approval letter is hopelessly outdated. You have no ally to give you advice, negotiate on your behalf, or help you navigate the sea of disappointment you now feel.
After a couple of these disheartening experiences you realize you actually need one of those Buyers Agents, even though you have access to MLS listings, and can see properties through Open Houses. The Arlington housing market is fairly competitive for good listings at the entry level. Those could range anywhere from $299K to $600K. There are currently 26 single family homes Under Agreement in Arlington in that price range, and half of those went UAG in under two weeks. Many people missed out on those properties, having placed Offers on one or more of them, and still didn’t get a house! This is an awful experince.
The arithmetic is pretty simple: when there are more Buyers than available homes, somebody is going to get left out. When inventory is behind demand, we start seeing this with new listings: “Offers, if any will be presented Sunday at 6pm”… These words are like a red flag that it’s a hot listing at a hot price… or the listing agent thinks so anyway. Often there is a flurry of activity over the weekend and somewhere from two to eight offers on a property.
How to Win in a Multiple Offer Situation
This is valuable information coming up…
1) Don’t go it alone. Since it costs you nothing, and gives you many advantages, you should hire a Buyer Agent. They can put you on a level playing field with the other Buyers, and also represent you directly with the Sellers.
2) Have your Pre-Approval letter updated every three months at the minimum. When you put in an Offer, you need an updated letter. Some lenders actually don’t work weekends, which is when you may need it suddenly updated, or for a different price. Be in touch with your lender regularly during these times, especially if anything changes with your employment. Contrary to popular belief, this does not affect your credit rating.
3) Get access to timely information from MLS. Some of the public sites are woefully outdated, showing things available that have been Under Agreement for a week, and new listings showing up 3 days late. Have your Buyers Agent help you get hot MLS listings, and daily updates.
4) Learn the Market, know your limit. Be prepared to stretch if you need to. If you understand your finances, and know what you can afford, you can bid accordingly. Your Buyers Agent should do a Comparative Market Analysis on a property you’ve identified as your target. Knowing what other similar properties have sold for recently is one indicator of what a home is worth. But knowing the local market, if you see it is competitively priced and has high appeal, understand this is not the time to low-ball an offer. You may find yourself going over asking price, which seems crazy if you listen to the national news media, but Arlington is different! Some agents intentionally price a property aggressively to stimulate multiple offers, and get the best price for their Seller.
5) Highest and Best doesn’t always mean Highest. When multiple offers are presented to a seller, sometimes they have a difficult decision. Imagine if you were a Seller in this position, and you received three offers, all approximately asking price. You may still be looking for your next home, and need time to find it, therefore you want a closing date as late as possible. It may be what you’re looking for is price, solid financing, and a late closing. So when the Sellers go back for “highest and best” in a second round of negotiation, this is the time to have your Buyers Agent ask the Seller, “what TERMS are they looking for?” I have seen offers won on closing dates alone, because the offering price was fantatic from several buyers, but one in particular matched the Seller’s other needs.
If YOU want to have the VIP Buyer’s advantage, contact me today for a complimentary consultation, where we can discuss your goals, and get you through the competitive maze and on to home ownership!