Winning a multiple-offer competition

Lately, the home-sale market has picked up in some areas and price ranges. Multiple-offer competitions are more prevalent, particularly in popular neighborhoods where there's little for sale.

It's always difficult to decide what to offer when you're in competition. It helps if you've done your homework and you know local market values well. Working with a good real estate agent who can keep you informed on current market trends is helpful. The Internet has a wealth of information about listings in most areas of the country.

Attending public open houses in the neighborhood where you'd like to live is also a good way to learn about values. However, don't be misled by the list price. Some listings are priced at market value, but many are not.

The most significant information is the sale price of comparable listings that sold within the last three months. In multiple-offer situations, a listing might sell for over the asking price. However, this is not always the case.

A complicating factor is that some sellers intentionally price their home low in order to stimulate multiple offers. This is particularly so with short sales and foreclosures. For example, a listing priced at $325,000 that receives 10 or more offers might really be a $400,000 house.

HOUSE HUNTING TIP: It takes a lot of time and emotional energy to make an offer. Buyers are often devastated when they lose, and some buyers fail over and over. You can minimize the agony if you are realistic about what you can afford and about the accuracy of the list price.

If you know that a listing priced at $325,000 is likely to sell for $400,000 or more, you can tailor your offer accordingly. But, if you can afford to pay only $335,000, your offer probably won't receive serious attention if there are six or more offers. It might be better to pass on this one and save your energy for a listing that you can afford to buy. ...CONTINUED

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