Are you in a red-hot seller’s market where listings sell the first day with multiple offers? If so, you can turn this seemingly difficult situation into a huge competitive advantage if you know what to do.
I recently had a conversation with Mary Pope-Handy who works the Los Gatos market near San Jose, Calif. The region has a population of 1.2 million, and listing inventories over the past few years have averaged between 4,000 and 5,000 properties. Currently, there are approximately 770 homes on the market. This is not only a red-hot seller’s market, it’s a blazing inferno. The result: multiple offers pushing realistically priced, $600,000 listings up to $800,000 or more.
Some buyers in hot markets with a low inventory of homes for sale are losing out over and over in multiple-offer competitions. You can improve your chances of having an offer accepted by clearing up any issues that might cause a seller to look askance at your offer when compared to one from another buyer.
If your purchase offer is littered with contingencies that protect you, the sellers are more likely to see the contract as risky, especially if they are looking at other offers that contain fewer contingencies.
Markets are heating up all over the country and multiple offers are making it difficult for both buyers and sellers. What can you do to make sure that your buyer or seller achieves the best possible outcome when there is more than one offer on a property?
Most of the country is shifting from the depressed buyer’s market we have experienced for the last few years to a raging seller’s market where properties can have 10 or more offers. As a listing agent, having two or more offers would appear to put you in the driver’s seat. The truth of the matter is that the fallout or DFT (deal fell through) rate on multiple offers is often 40-50 percent. For properties where there was only one offer, the DFT rate is approximately 10 percent.