In this video blog post, Tara discusses some strategies that buyers can use when submitting offers on a home that might have multiple offers already.
Hey there, Tara Simmons here with the Sold by Simmons team at Berkshire Hathaway HomeServices. And today I just wanted to do a quick video to talk to our buyer about the marketplace.
It’s no big shocker that our Denver market has been on fire the last couple of years and it’s pretty tough out there for buyers. And I know buyers can feel like they’re being beaten up by the market a little bit sometimes. So today I want to focus on some strategies that you can use to help make your offer be the winning offer against multiple offers on a particular property.
The first thing I want to focus on seems pretty obvious but it’s price.
So you know offering over asking price is not uncommon in our market, especially here in South Denver. Obviously this can kind of depend on what particular price range you’re in, particularly homes that are listed under $500,000, if it’s a really nice property, we do a lot of business here in Highlands Ranch, those homes sell very quickly and oftentimes go over asking price.
I think the best advice that I could give on offering over asking price would be to trust us. Trust your agent. Trust your trusted advisor in helping you to determine how much over asking the price you need to go.
It’s not just a number that we’re picking out of the air, this is a number that’s based on statistics. I know a lot of people would love for their realtors to have the crystal ball so that way we could always tell you what will work, but all we can do is go off of statistics. Trust us, we wish we had that crystal ball too.
But we can look in a particular neighborhood, we can see of other homes that have sold in the last 60-90 days, what they have sold for. Is it 101% of asking? 102? Is it 107? Whatever the case may be. So we can use those analytics to help you determine how much over asking price you’re willing to go.
And keep in mind, I know it can be really stressful, we’re talking thousands of dollars, not hundreds of dollars and so people can sort of freak out sometimes when you are increasing that number, you know worrying about $5,000 or $10,000, which is certainly a lot of money, however let’s put it into perspective.
Every $5,000 is equivalent to about $25 a month in your mortgage payment. So one of the things that you should keep in mind is if you’re having to offer $5,000 over asking, that’s really only going to affect your mortgage payment by about $25. So obviously, $10,000 should be about $50 a month. Hopefully, that brings things into perspective in terms of your asking price.
The other thing that we should talk about in terms of getting a winning offer is bridging the appraisal gap.
So offering a high number doesn’t mean anything to a seller unless you are willing to bridge a gap between the contract price and appraisal price if for some reason the property does not appraise for your contract price.
The appraisal happens three or so weeks down the line and nobody, buyer or seller, wants to have a deal fall through at appraisal at that time. So as a buyer, if you’re offering $5,000 for example over asking price, it’s probably a really good idea to put in an appraisal gap clause into your contract that’s saying, if the house does not appraise for contract price, that you’re willing to bring in X amount of dollars above and beyond the appraised value to bridge that gap. So that’s something we can do to help walk you through that process.
Some other strategies are taking the property as-is.
A seller wants to know what their bottom line is, they don’t want a buyer who’s going to be nitpicky on small cosmetic things, things that you can see when you walk through the house at your showing.
They don’t want to be nickeled and dimed, especially in this competitive market when the next buyer might not be as picky.
So it doesn’t mean that you’re waiving your right to inspection, it just means that you’re having your inspection and you’re agreeing to waive your right to ask for repairs, which is helpful, or if you’re not willing to go that far, at least you can agree to take the house and say, when it comes to inspection, we’re only going to asking for things that are of health and safety related or of a high replacement cost. So something that’s really expensive that the seller had no idea, you might ask for that.
The last thing that sometimes works is submitting a personal letter to the seller along with your offer. We’ve even seen people do videos, that sort of a thing, to entice a seller to accept their offer. Personal letters have their pros and cons, so I’m going to do a whole separate video on personal letters, the pros and cons, yay or nay. It can all be tricky.
Everything can be thrown in the offer. Use us as your trusted advisor. We build a lot of relationships with the agent on the other side so we can have a win-win for everyone.
Don’t hesitate to reach out and ask any questions and certainly feel free to comment and let us know if you have any other strategies that you’ve thought of that I didn’t cover here today. Thanks so much, have a good day.
Ask The Sold By Simmons Team
If you have any questions, certainly don’t hesitate to reach out and ask, comment, call (720-308-6035) email (Team@soldbysimmons.com), text at any time. We’re always happy to be an open book.