Here are seven strategies you can use to help your buyers win out in a multiple-offer situation:
1. Know the market. By this I mean you need to study the recent comparable sales and, more importantly, the most recent pending sales.
2. Go big or go homeless. Obviously, you want to make an offer that’s higher than the last known comparable pending sale. If there were four offers on a recent pending sale, that means three buyers who lost out on the home will be looking to offer a higher price the next time around.
3. Consider using an escalation clause. This is an addendum to your client’s purchase agreement that guarantees they’ll offer a higher price than the next highest offer up to a certain amount. Talk to the listing agent before you use this clause, though, because some agents have never seen it before and might not understand how it works.
4. Waive as many contingencies as possible. Get your buyer pre-approved before they make an offer so that they aren’t carrying any loan or appraisal contingencies with them. Many sellers in the Bay Area also do pre-inspections, so if you and your client are comfortable trusting a pre-inspection, you can waive your own inspection contingency. If the seller hasn’t done a pre-inspection, you can still get the inspection contingency waived by asking the listing agent to have it done prior to making your offer.
5. Put down a huge earnest money deposit. A customary earnest money deposit in our area is 3% of the purchase price. If your buyer has the funds, have them put down 10%. Your client’s not taking on any more risk, because the liquidated damages clause maximizes liquidated damages at 3%.
6. Write a love letter to the seller. Writing a love letter has helped our team’s clients win out in a multiple-offer situation even when they didn’t offer the highest price. Have your client include pictures of their own family, and if possible, have them shoot a quick video on their phone that you can then text or email the listing agent.
7. Create urgency. In a quick market like ours, the first person to the party is often the winner. With that in mind, consider sending a pre-emptive offer to the listing agent. They have an obligation to show the seller that offer, so you don’t need to ask permission.
If you have any more questions about how to come out on top in a multiple-offer situation, don’t hesitate to reach out to me. I’d love to help you.