This is it. You found your dream home in Northern Virginia and ready to submit your first offer. Offer to acceptance process could be stressful sometime there are multiple offers on the property. The term “multiple offers” seems to scare the buyers. Multiple offers don’t necessary mean that a home will sell for more than the asking price. Do not be discouraged by thinking you may or may not get the house. Keep your emotions in check. Normally it is rare for any first offer to be accepted in its entirety. Upon receiving your offer, the seller is faced with three options:
Accept your Offer: Seller may agrees to all the terms and conditions, exactly as set forth in your offer to purchase a home in Virginia. Congratulations! You are on your 1st step to buying a home in Northern Virginia.
Reject your Offer: Seller may not agrees with the terms and conditions set forth in your offer to purchase a home in Virginia and may reject it.
Counter your Offer: Seller may agrees with some of the terms and conditions of your offer, but not all of them. Seller then makes a counter offer to you. The counter offer may change the purchase price or settlement date, or add or remove other conditions.
Here are some important key things that will help you make your offer strong to win over another offer:
Negotiating Multiple Offers in Northern Virginia Seller’s Market
In a seller’s market or fast market, there are more interested home buyers than there are homes for sale. Usually homes sell quickly and near their asking prices. Sellers have the negotiating advantage. When there is less inventory on the real estate market, it’s not unusual for a seller to receive more than one real estate offers. If you find your dream home, submit your best offer immediately. Here are some valuable tips to make your purchase offer the best out of rest:
Tip #1 Put a Large Earnest Money Deposit.
The earnest money deposit is part of your down payment. Standard earnest money deposit amount is between 1%-2% of the purchase price. By putting above normal limits, you are showing the seller that you are serious about closing. After all if you are really serious about the home you want to buy, then there is nothing wrong to go above your limit to show.
Tip #2 Submit Strong Pre-approved letter to show the seller you are Qualified.
A pre-approval letter is required to be submitted with the purchase offer. Being preapproved makes you a stronger buyer in the seller’s eyes. In today’s real estate market, you can get loan commitment without purchase contract which is only based on your credit, assets and income. This is called credit qualified.
Tip #3 Allow the Seller Time to Move after closing.
In normal transaction seller vacates the house on the day of walk-thru or settlement. Sometimes it is not possible when seller is buying another home and selling at the same time. Selling of his/her home first may be required before closing on purchase which could delay the process of moving out by day or two. By offering few extra days to move out after closing without any condition will make the seller life easier.
Tip #4 Eliminate unnecessary Contingencies.
If your loan is credit qualified and you lender gives you a solid loan commitment, remove the loan approval contingency. Discuss with your agent about comparable sales to decide if you could remove the appraisal contingency. Standard contingencies are Financing, Appraisal and Home Inspection. By eliminating 2 of these contingencies, makes your offer strong. You should always keep home inspection contingency just in case there is problem with house.
Tip #5 Submit Your Best Offer.
Sometimes sellers intentionally put a house price below equivalent sales to generate multiple offers, so paying some extra doesn’t mean you are paying over market value. Try not to leave room for negotiation. Submit your highest and best offer. Make it attractive, maybe a bit above list price. Get your agent opinion for a comparative market analysis to determine pricing.
Negotiating Multiple Offers in Northern Virginia Buyer’s Market
In buyer’s market or slow market, there are more homes for sale on the market than there are interested home buyers. Usually homes take longer to sell and often sell below asking price. Buyers have the negotiating advantage. This is usual to have only one or two offer on the property meaning you might be competing against one buyer in-lieu-of 20. Here are some valuable tips for winning.
Tip #1 Sell Your Exiting Home First.
If you have a home to sell, don’t buy before selling. You may not need to sell your existing home if you are qualify with both mortgages. You can rent your existing home for time being. If your submit your offer with a contingency of sale of existing home, the seller’s first preference will be toward the offer without a contingency to sell.
Tip #2 Be Nice to Seller.
If you don’t need the closing cost then you would better off not asking the seller to pay for. You can offer to pay some of the seller’s closing cost. To do extra you can pay for seller’s moving cost and give extra day to move after closing.
Tip #3 Find Out What’s really Important to the Seller.
Ask your agent to find out the key reasons why seller is selling and what is really important. Listing agent may not be able to disclose seller’s personal reasons but may share some clues what will take to win your offer. Maybe it’s a fast closing. Maybe seller is buying another house and needs to sell this quickly to get cash out for next purchase.
Tip #4 Share the Love.
Most sellers are original owner of the house and have an emotional attachment to their home and want to see it fall into the hands of an acceptable home buyer. Be that acceptable buyer. Write the seller a brief letter explaining to show how much you love this house and why you want to buy this home. When writing letter to seller, put your human heart and request why you deserve to be chosen as the winning offer.
Tip #5 Prepare for a Counter Offer.
Even though you have submitted your best offer , seller retains the right to choose or reject multiple counter offers. Be prepared for counter back from seller. If you receive counter back, discuss with your agent and have your agent find out how many offers seller has received and how many he/she countered back. If seller only countered your offer, you are the lucky buyer. Now the deal is in your court and it will be lot easier to win.
