Buy Side – Multiple offer cases
Multiple contract offer cases do not allow the buyer the luxury of underpricing, seller subsidies and contingencies. When presenting an offer, check with listing agent if there are other contracts on the table. If so, we need to advise our buyer that a traditional approach will lose.
When dealing with multiple contract offers, you need to try to offer full price with escalation and no contingencies. That wins! (And its not always that hard). Here’s how:
On Multiple Offer cases, try to eliminate contingencies.
Home Inspection contingency: I suggest no home inspection. Remember a home inspection on any home, has things to be fixed. And you want your seller to do it? If something is not working after you move in, get a repairman. The inspection costs about $400-$500. Instead suggest that buyer buys a HMS Home Warranty for one year for $500. ( or as a closing gift, buy it for them.)
Finance contingency: Check with lender on how strong your buyer is in qualifying for the loan. Is a finance contingency really necessary? You can ask the lender, but be sure he is qualified. That is why I suggest Andy Sikora 703-505-2999. He will tell you point blank yes or no.
Appraisal contingency: Usually the appraisal is only off by $5,000 or $10,000. Is your buyer capable of paying that difference if it does not appraise?
The contingency is basically saying if the house does not appraise, the seller has to reduce his price. (It would not be much of a difference anyway in most cases, if any. Buyer should handle it.)
Settlement date should be about 30 days out. In cover letter state buyer is flexible on closing date.
Earnest Money Deposit: The bigger the better. It’s no skin off the buyers back unless he defaults or backs out. At settlement it is credited to buyer’s closing costs.
The full price contract with escalation and no contingencies usually wins. Otherwise you might need to find another house.