The market is HOT for houses under a million dollars and buyers are finding themselves in bidding wars left, right and center. If you want a house under a million dollars you might need to prepare yourself for war. You may also find yourself reverting back to your high school days of dealing with a bully or perhaps being a bully yourself!
A bully offer, or as I like to call it, a “pre-emptive” offer, is when a buyer submits an offer before the agreed upon offer presentation date/time. A Seller may request a specific time and date in which potential Buyers present their offer and this date is usually scheduled about a week after the property was broker loaded to MLS.
The idea behind the offer presentation is that hopefully the Seller creates a flurry of interest and invites multiple offers to the table. The Seller will then have the chance to review all of the offers and decide which offers are out of the running, which they would like to send back for “improvement”, or simply accept the one offer that blows everyone else away, both in price and “cleanliness” of the offer.
Here are a couple of tips to consider in a multiple offer situation:
- Do your research. Make sure you know what the the fair market value for the home is. Your REALTOR® can help you with this. If the house is listed for $699,000 and all of the comparables are selling for $850,000 – you should know ahead of time and decide if this is something you’re willing to pay.
- Determine the highest price you are willing to pay before you enter into a multiple offer situation. This is best done before emotions come into play as you can easily get carried away and end up paying too much.
- Entering multiple offer situations can be emotionally exhausting, especially when you keeping having to do it over and over again. Keep in mind there will always be another home which you will love just as much, if not more than the one you just lost out on.
- Be ready to pull the trigger. Have your deposit ready to go! Sometimes being able to make a quick decision can help you beat out those who are taking time to think it over.
- Make your 1st offer your best offer. If the home has only been on the market a couple of days, the seller is likely not going to accept much under their asking price.
- Consider waiting for a slow market. Historically August and December are slow real estate months. Buying during this time might mean less competition!
- Want to ignore the offer date? Make your best offer early and submit it before offer presentation. If it’s good enough, the Seller might be tempted to accept it before seeing the other offers.
- Work with a REALTOR® who knows the game and the best strategies to help you win!
I’ve been involved with multiple bidding wars and pre-emptive (bully) offers. Should you want to learn more, contact me.
