Multiple Offer Market: What You Should Know
If you live or are moving to the Richmond area you've probably noticed there are few houses on the market right now. If you're looking in popular neighborhoods, good school districts, or the $200k - $400k range it's even more scarce. That means the second that perfectly priced, beautifully renovated home in your dream neighborhood comes up for sale you'll likely be in a waiting line to see it the same day it's listed.
This type of market is when we tend to see multiple offers on homes. Many of my buyers this season are trying to get ahead of the spring buying frenzy but are still ending up in multi-offer situations. Just this week, a home I assisted a couple submit an offer for had 12 offers and was purchased for $25,000+ over the original asking price with no inspection terms! Now, that's not the average home and we don't always see that many offers but it does happen. Unfortunately, we were not the ones offering $25,000+ over the asking price so my clients didn't get that home. I did successfully help another newlywed couple, and my best friend, secure their dream home just yesterday though in a similar market. This home was on the market for 20 minutes and already had eight scheduled showings. We were under contract within six hours of this home being publicly available to view because my clients were prepared for a multiple offer situation.Buying a home at a time when there are fewer houses than there are buyers means being smart, strategizing beforehand, and knowing what makes a strong offer. The biggest thing you can do is offer your Highest and Best the first time. What does that mean? It means the long negotiating process you see on House Hunters and Property Virgins isn't realistic in a tight. When you submit an offer on a home, make sure it's the best you can do. A multi-offer market is not the time to try to score a good deal.
How to Prepare for Your Highest and Best Offer
- Consider Removing Closing Costs. If you don't need the closings costs and you could cover them yourself remove the request for the seller to pay those from your offer.
- Increase Your EMD. Increasing your EMD can show the seller you're serious about purchasing.
- Remove Inspection Contingency. Before doing this default to your agent's recommendation based on the home. Virginia is a Buyer Beware state, meaning you cannot come back and ask the sellers to fix anything wrong found with the home after purchase if it is not written into your offer. This also means no matter what you find in the home your contract cannot be terminated due to defects with the home. This is why this is an appealing option to sellers.
- Offer More Than Asking. Consider how high you're willing to go with your budget and what the neighborhood can support. Going over asking is reasonable to a certain extent, you just have to make sure the home will still appraise. If you offer asking be sure to include that the home purchase is contingent on appraisal unless you have the cash on hand to pay the difference.
Happy Hunting,
