Spring is a time for multiple offers on homes. There are always homes that sell in multiple offers but not that many. Here are some tips for buyers:
1. This isn’t 2005, there is a limit to how much a home will appraise for. Unless you are a cash buyer your lender will appraise the property before loaning you any money. The home will be collateral on the loan and lenders do not want the loan amount to be higher than the value of the home. This can be a problem if the buyer is offering more because they are also asking the sellers to pay some of their closing costs.
2. Generally you won’t get to see what is in the other offer and will not know who made it, but your agent should ask what is in the offer. I like to ask if it is a good offer.
3. Yes you can ask for proof that there really is another offer. Unfortunately with the bank owned properties some agents won’t cooperate. In fact buyers should ask for proof that their offer was presented to the bank.
4. No you don’t always have to offer more than the asking price or even the asking price to win in a multiple offer situation but keep in mind that other buyers are competing with you and they may be willing to go over the list price. If the numbers are close the cash buyer can win out with a lower offer.
5. My advice is to put your best foot forward and make your best offer and to assume that other buyers are doing the same. If you lose out move on.
6. In every multiple offer situation there is a winner, someone has to be the winner it could be you.
Don’t second guess yourself when it is all said and done. You will wonder if you offered more than you had to or if you did not get the house if a few hundred more dollars would have done the job. You will never know and I like to think everything happens for a reason.