How Can I Be the Winner in a Multiple Offer Competition ?

by Dian Hymer

How can you improve your chances of success if you find yourself competing against other buyers for a home? The winner is usually the most qualified buyer who offers the best price with the fewest strings attached.

A clean offer is one that's not loaded with contingencies -- conditions that must be satisfied in order for the sale to go through.

Typical home purchase contract contingencies are financing, inspections and the sale of another home. Beware: You shouldn't forego contingencies if they involve conditions that you must satisfy in order to complete the purchase.

However, one way to put yourself ahead of the pack is to satisfy as many conditions as possible before presenting your offer. For example, you may not be able to get completely approved for financing. But you can get preapproved for a loan.

Preapproval is a process that involves submitting a loan application and supporting financial documentation to the lender. If approved, the lender agrees to give you a loan subject to you finding an acceptable property. When the property is located, the lender will want an appraisal and satisfactory title review.

Buyers who find a place to buy before they're preapproved should at least submit a loan application to a lender or mortgage broker and have their credit checked before writing an offer. This way, the loan agent or broker can write a letter stating that the loan application is in and the credit is acceptable.

The winning buyer in a multiple offer presentation is often the one who makes the highest offer. Sometimes there are many buyers making offers for more than the asking price. Knowing what to offer in such a situation is critical.

Learn as much about local market values as you can. Look at comparable properties. Ask your agent to prepare a comparative market evaluation of the property that will tell you recent selling prices of comparable properties.

When market values are rising, there's a bit of guesswork involved in pricing. You may need to be a trendsetter and pay a bit more than yesterday's comparable sales in order to be the successful bidder.

First Time Tip: Find out all you can about the property before writing an offer. Get copies of any existing reports and seller disclosures. Read these, and if you find them satisfactory, let the sellers know that you have read and approved the reports.

Sometimes buyers who know they're in competition will have properties inspected before an offer is made. Ask your agent to find out if other buyers are having pre-sale inspections done. If so, you may want to ask the sellers for permission to complete a home inspection, and any other inspections you deem necessary. This will enable you to make an offer that doesn't include an inspection contingency -- assuming you find the property condition satisfactory.

Find out as much as you can about the sellers and their situation. If you meet the sellers personally let them know how much you love their home. When you're in competition with other buyers, there's no point in playing poker-face. Sellers can be swayed by emotional appeal, particularly if they're looking at several very similar offers.

Try to stand out from the pack. Have your agent include a written biographical and financial sketch of yourself with your offer. Or write it yourself if your writing skills are good.

The Closing: If at first you don't succeed, don't give up. Look at a failed attempt as a learning experience that will help you to succeed the next time.

Copyright 2002-2006 Dian Hymer. Distributed by Inman News Features