Multiple offers are a nice problem; here are some tips that will help.
If you’ve paid any attention to the news lately regarding real estate, you know we’re in a very hot seller’s market. Due to this, houses that are listed in a good area and are priced appropriately will have multiple offers. How do you navigate these offers and pick the best one? Here are my tips:
1. Take a look at the environment you’re in. Calculate the absorption rate first, which is the measure of supply and demand for your particular area. If you look back at the previous six months of sales, it will give you a better idea. For example, let’s say you live in a planned-unit development that has had 10 sales in the last six months with two active listings. We know that they’re selling just shy of two units per month and can come to the conclusion that you have just over one month of inventory. In a normal market, there are around six months of inventory. When inventory is significantly less than 6 months you are in a strong sellers market. And, the opposite is true, when it rises above 6 months you’re in a buyers market.
2. Time the listing. We like to do this so that our clients are appropriately navigating the market. We want to get the most traffic without losing the initial drive and demand for a new listing. I like to list homes on Thursdays because a majority of buyers want to look at homes in person on the weekend. Putting your home online on a Thursday gives buyers two days to find it, another day or so to make an offer on it, and another day or so for you to accept that offer. By Monday, your home could be under contract.
3. Put your best foot forward. In the past, I’ve seen plenty of houses hitting the market before they’re ready and still try to get top dollar. You can’t do that in today’s market. Buyers are motivated, but they’re motivated to buy a move-in ready home that doesn’t need a lot of work.
4. Plan the response. Once you receive all your offers and analyze the price and terms of each to figure out which is the best offer for your situation, it’s time to negotiate!
5. Negotiate. Many sellers think you just have to pick the highest-priced offer. Inevitably, there is not always a clear winner when many bidders are involved. One offer could have a higher price but come with a contingency. You can go back to this buyer and let them know you like their offer, but won’t accept it with the contingency, for example.
These are my best tips for navigating this crazy market as a seller. If you need more advice or have any real estate questions I can answer, don’t hesitate to reach out via phone or email. I look forward to hearing from you soon.