We have seen a change in the market the last year and a half or so. There used to be an overload of inventory and lots of choices for buyers. Before, you could think about it overnight and bring your parents through for a second opinion. Things are different now. Inventory is much less available and that means that the speed of the market has really increased. It also means that it is much more likely that you won’t be the only person that is interested in that house. What do you do if you’re notified that you are in a competing offer situation?
1) Know what you want so you can make a quick decision. Do your research ahead of time and be familiar with the market so that you recognize the location and amenities that are important to you. The delay of indecision might make the decision for you. Make sure you are pre approved with a lender so that you are able to make an offer when you see the right house for you!
2) Put your best foot forward. Work with your agent (hopefully me!) to do research on the area and know what market value is and determine what would be the highest you would be willing to go and go there. Typically the seller does not counter in a competing situation, they just sign the offer they like the best. Don’t hold back!
3) Be agreeable on terms besides price as much as you are able. I’ve experienced where a seller took our offer because of the closing date, possession terms, waiving inspections, earnest money, or any other terms that might be important to the seller. Sometimes quick (or slow, depending on their situation) is as important as price. Have your agent ask questions as to what is important to the seller.
4) Tell your story. When someone has been living in a home they love it and have good relationships with their neighbors they really like knowing that they are leaving the house to someone who will also help shovel for their elderly neighbor, has kids to play with their kids, has roots in the neighborhood, or just really like their home. I love to let the seller know as much as I can about the buyer so that there is an emotional connection. Having said that, if you really want to prove how much you love the house, money talks. But, if everything else is basically equal having someone that the seller feels will love the house as much as they did can be very important.
Whenever you make an offer there are two risks: the risk of overpaying and the risk of not getting the house. The buyer needs to decide which one is scarier and then make an offer based on that. Make sure you are working with an experienced professional that can help advise you on the risks of either!