If you know someone who’s sold their home this year, you’ve likely heard a bidding war story or two.
Home sales are zooming along at a record pace. Yet buyers continue to run into roadblocks. There just aren’t enough homes on the market to keep up with demand.
Amid the ongoing pandemic, seller’s markets are still holding strong across the country. And in many cities, buyer demand is up while inventory remains at historic lows — leaving homebuyers battling multiple-offers situations and sellers trying to navigate it all.
According to a recent industry study, nearly half of recent home deals came with multiple offers. That leaves sellers with an interesting problem: How do you know which offer is best?
Nearly half of recent home sales came with multiple offers.
Here are four easy ways to make the most of your next home sale:
1. Turn Up the Competitive Heat
Before we dig into how to identify the best offer of the bunch, let’s talk about how to increase competition in the first place. When the market’s hot, it can be tempting to crank your asking price up as high as it can go. But choosing the right pricing strategy is still critical for maximizing the response we get from the market. Second is to present and 'launch' it in it's best light. This includes great photography. Accurate details. Virtual Reality Walkthrough and more. All while employing the service of a strong digital marketer who knows how to leverage todays technology to successfully expand exposure.
2. Give Buyers a Deadline
We’ve all heard the saying: Your first offer is always your best. But in a strong seller’s market, that may not be the case. Upon received multiple offers or news of their forthcoming, it common to set a deadline for when the buyer's best and highest offer shall be due. Where do we draw the line? We set an sensible timeframe for the strongest pool or potential buyers to see the home and make a reasonably fast decision. That not only creates a sense of urgency, it also enables a seller and their agent to compare all the offers before picking the best one.
3. Certainty: How strong is the buyer?
Once we’ve received all the offers, we move on to evaluating the certainty of the offer. What offer is going to present the best collection of terms to produce the best overall outsome for the seller's own circumstances.
Here are a couple considerations:
a.) What is the closing date — and does it work with your timeline?
b.) How flexible is the buyer on timing?
c.) Is it an all-cash offer?
d.) How financially secure is the buyer?
- Down Payment amount
- Earnest Money Deposit
- Preapproval
e.) Are there any contingencies?
- Appraisal
- Home Inspection
- Sale of another home
4. Beware the Pitfalls
Weighing offers puts you in the position of power. But be careful not to risk it. Even in a market moving as fast as we are seeing, it still has it's limits.
Stringing buyers along in an effort to build demand and hoping for a higher price, for example, can backfire if you wait too long to respond. While tilted heavily in seller's favor, buyers remain cautious, calculated and more educated than you've ever experienced.
Counter offers are another slippery slope. Think about the number of serious offers you have in hand before upping the ante. Negitiation is all about leverage. When you have the best value on the market and buyers are responding in high volume, you have the leverage. When you are only working with one buyer, your position is not as powerful.