November 5, 2014

4 Steps for Handling Multiple-Offer Situations

There are times when a buyer finds a property they want to buy but then they find out there are other offers on the house. This is called a multiple-offer situation or “bidding war.” This can be a distressing situation because you have to compete with other buyers to purchase the home. If this does occur you need to follow a course of action that will protect your financial interests and give you the best chance of having your offer accepted. Following these steps will help you navigate the process:

Step 1: Try to become somewhat emotionally detached from the idea of purchasing the home. You do not want to become too aggressive in your approach because you may be tempted to overbid. You have to remember there will always be another house around the corner to look at in the near future.

Step 2: Have your agent assess the value of the home so you do not overbid. The listing price of the property may be well below market value simply to stimulate a bidding war. In the end, the property may sell for market value.

Step 3: In order to put in a competitive offer you really need to think about putting in a “clean offer” that does not have conditions. This is not wise if you are not certain you can get a mortgage or if you did not have the home pre-inspected by a house inspector. If you are serious about bidding in a multiple-offer situation it is possible to pay for an inspection prior to putting in your offer. You also need to be sure that you will actually be approved for a mortgage.

Step 4: Put in an offer that makes sense. If your offer is accepted – great! If it isn’t, we simply move on and start looking again.