Buying a new home is always a journey, from start to finish, and sometimes the competition can be fierce. Imagine searching for the perfect home and eventually identifying the "one," only to discover that two or three other buyers are in love with the same property. In the current Central Oregon market, having multiple offers on a home is becoming fairly common. During the beginning of the COVID-19 shutdown, the number of buyers, listings and real estate transactions all decreased. Now that restrictions are being eased and people are getting out and about, there's been an influx of buyers and the number of new listings isn't keeping up. This means low housing inventory and high demand.
In a competitive real estate environment, being prepared is essential to having the best chance at securing a popular home. Buyers can gain a leg up on the competition by presenting an attractive, straightforward and aggressive offer in an intimidating multiple offer situation.
Choose a lender
The number-one first step is to meet with a lender to establish a realistic budget and determine a monthly payment that's comfortable. A lender will also provide buyers with a pre-qualification letter, based on a quick conversation or the more desirable pre-approval letter, and based on financial documentation and actual credit score. Some lenders will take it one step further and have the buyer through the underwriting process and simply waiting to input an address before an offer is even written.
Put your best offer forward
It's best to strategize with a knowledgeable realtor—but when there are multiple offers on the table, be prepared to pay over asking price. An excellent question to ask is, "At what price would I feel OK letting this home go to another buyer?"
Some sellers will ask buyers to submit their highest and best offer. If a buyer presents an offer at the absolute highest price they're willing to pay and someone else outbids them, the buyer may have fewer regrets.
Another approach is an escalation clause, which allows a buyer to present an offer starting at a certain price that will increase in set increments to a maximum point, giving the buyer an opportunity to outbid others but not overpay.
Be ready to move quickly, but not hastily. Prepare to view properties as soon as they come to market and make prompt decisions. Hesitation can be the difference between having a chance at your dream home or someone else moving in. In this climate, buyers are anxious to make a purchase and many homes are going pending before officially hitting the market.
Appeal to the seller when setting the closing date. Find out if a quick closing is best or what's preferable to them. Craft a personal letter to the seller and make sure to be descriptive about why this is the perfect home. It may sound trivial, but this will be meaningful to some sellers.
Following these steps will help to set an offer apart from the others and give the best chance at receiving an invaluable accepted offer.