Multiple Ways to Stop Losing with Multiple OffersJanuary 17, 2021
The Miami housing market is going well in a lot of areas because supply is low and demand is high. This means there’s a lot of people putting in offers on too few properties. With many listings, multiple offers to buy the home are submitted. In the end, only one offer wins. All the others lose.
We recently talked with a couple at an Open House. They had tried desperately for several months to find a home. They were competing with lots of other families, attempting to buy a home (in a highly competitive price point) in a very popular community.
After experiencing four rejected offers, despite their smiles and engaging personality, their eyes gave it away: they were tired, discouraged, and losing hope that they will find a home.
Living the “find-a-home-make-an-offer-lose-the-house” cycle week-in and week-out can take a real toll on a person … emotionally, mentally, and relationally. All to repeat the cycle again and again. It’s easy to feel like down … but understand this is part of the process in a sellers market and if you follow this advice did does not have to happen to you.
Here’s is some advice for anyone who feels the sting of losing in a multiple offer
Don’t take it personally – The seller does not know you. They are not rejecting you. There’s another offer to buy their property that makes more sense for them. It may be a higher offer price, less contingencies, or a stronger financing arrangement than what you’re able or willing to offer. Regardless, it’s not you.View this as the short chapter in your life that it is – This too shall pass. You will find a home. You will live in that home. You will make memories in that home. And you will tell stories about how you found the home. And when you do, you’ll realize that the weeks of disappointment were worth the many years of enjoyment in your home.
Strategies to never get your offer rejected again
- Submit your best offer – So you have no regrets that you gave your best shot. Going a bit lower in price can give you some wiggle room but a 10-20% discount will likely alienate the seller and may make it that much more difficult to recover in the negotiation.
- Always know the maximum amount – your willing to pay and comfortable spending — while any agent will be glad to sell you a home a true buyer’s agent that is on your side will advise you and respect your budget and objectives — so let them know ahead of time so they can effectively come up with the best negotiation strategy to get you the home at the best price possible. If you were outbid because someone offered more than your budget or what the home was really worth then you really didn’t lose.. you made a smart financial decision.
- Make an all cash offer- When you are trying to win you can offer more money for the home or alter the terms to be more favorable for the seller. If you have maxed out your budget and have enough cash on hand that you don’t need financing, making an all cash off is the best strategy you can use to increase your chance of walking away with the house.
- Waive most contingencies- Just as sellers like cash offers, they also like to see clean offers. A clean offer is one which a buyer has agreed to waive all or most contingencies, making the offer safer for the seller. “Eliminating many, if not all, of these contingencies shows sellers that this buyer is serious about purchasing this home and is giving themself no out whatever.
- Reduce your inspection period. The Inspection gives you protection against purchasing a home that is revealed in a poor condition, instead of totally eliminating this contingency perhaps you may wish to consider reducing the timeframe to 2-3 days instead of the typical 10 days or so– 3 days is sufficient to get a proper inspection completed and limit any major issues with the property.
- Up your earnest money- The deposit you put down on the home if accepted shows the buyer is serious. Although it can be though to shell out thousands if the seller has competitive offers to choose from he may feel more secure going with the offer that includes a larger deposit. In the Florida market typical escrow deposits range anywhere from 4-5% for financing deals and 10% or higher for cash transactions anything less than this will put you at a disadvantage.
- Be prepared – Make sure to review the standard contracts and forms ahead of time so if your realtor ask you to sign a new offer you can do it right away without waiting for an attorney to approve the paper or for you to take the time to read it without being rushed– especially in multiple offer situations even an hour delay can cause you to lose the home.
- Get proof of funds or a pre-approval letter – Sellers are often nervous that a buyer won’t be able to get financing or have adequate funds to close. You can improve your odds by summiting this with your offer –so make sure you prepare this ahead of time and gather the appropriate documents so you have them ready when requested.
- Avoid weak financing. If you need financing keep in mind that all pre qualifications are not the same, work with your mortgage broker to make sure you have a pre-approval with a reputable lender and a conventional loan program. Some sellers will limit their buyer pool by eliminating those coming with riskier loan programs like FHA/VA or if you are putting less than a 20% down payment.
Bonus strategies to continue on your search
Change your parameters – You may have to consider a different neighborhood, community, or school district. You’d be surprised what size of home, quality or home, or property size your money can buy in a neighboring town. Sometimes you have to count your losses to find a new ideal for you and your family.
Don’t give up – While you may be emotionally spent after losing out on a number of houses, don’t let too much time go by to buy a home. Even a short pause of 2-4 months in the home search can put you financially further behind. Because home values tend to increase each month, year-over-year, taking too long of a break can set you back quite a bit (between lost future equity, higher interest rates, and your buying power decreasing as home valuations increase).
Talk with your real estate agent – Your agent is there to help you. If you’re feeling emotionally beat up by the process, discuss how you’re feeling and come up with a refreshed or different strategy so you can find the right home for you and your family.
Make a change, if necessary – You might need to make a more extreme change, by finding a new agent. Before you do, share your needs with your current agent and listen to how they respond. This is not a step to be taken lightly, nor should it be done haphazardly. Find out why you lost on the home was it that your agent was not attentive to the situation or strong negotiator or could it have been perhaps the offer was not as strong as it could have been? It’s important to find out what happen in order to not just start over and repeat the same actions with a new agent and end up in the same place. Keep in mind that there are rules surrounding ending a contractual relationship with an agent. But in some cases, you may have to part ways– If you make a change, we can find an experienced agent for you.
The feelings of being a loss are temporary. Discuss with your partner what you want to do differently, what strategies need to change, and how to proceed with a new attitude and new plan so that your family can be the one holding a SOLD sign on the porch of your new home with big smiles on your faces.
Your best source for real estate and community information is your real estate agent. Contact Juan Leal at 305-982-7405 to learn more about local neighborhoods, discuss selling your house, or to tour available homes in Miami and surrounding areas.