Multiple Offer Strategies | Buyers and Sellers



Whether you are Buying or Selling Manhattan Beach Real Estate, it is fairly common these days to find yourself in a multiple offer situation. Your strategy can in large part determine the outcome.

If you are selling you want to evaluate offers on at least 3 criteria:

Price
Terms
Motivation

While it is very easy to become enthralled with the highest price that is offered, if that buyer is not motivated and their terms are terrible the price may not be as attractive as it appears to be on the surface.

For example, as a listing agent if I understand the "why" of why someone wants to buy I can get to their motivating factor. The family who has outgrown their 2 bedroom condo and needs a larger SFR is always more attractive to me than the renter who wants to own but has not other motivation. Also attractive are the buyers who may have been relocated and are in temporary housing with their personal items in storage. Best of all are the buyers who have already sold their current home and are on a leaseback. They have to find a place to live. So understanding need vs want who has to do something can help determine who your strongest buyer is.

The buyers who have to find a place to live are more likely to be more reasonable when it comes to terms, repairs, timelines and everything else that can derail a deal.

Part of the terms to evaluate are financing terms. Unless it is an all cash offer, how much are they financing and who is the lender. I always prefer to see a strong direct lender than a mortgage broker. Are there one or two loans. What can prevent the loan from closing.

In multiple offer situations, many listing agents will send out the same counter to everyone. There are times to do that and times not to. You are almost always better off crafting each multiple counter specifically to that buyer.

A lot of agents like to ask for "best and final" which most buyers don't like because they feel as if they are negotiating against themselves. No one wants to leave any money on the table but setting a specific number - which can be over the asking price may get a better response. And I always let the other agent know that if their wants to offer more than the counter, that's ok too.

As a buyer you should take into consideration the items I discussed above.

That's why those nice letters and pictures are so important. No one is going to accept an offer tens of thousands of dollars lower because you wrote a nice letter but if everything is close and you have personalized things and helped the seller understand your motivation it can only be beneficial.

As for your initial offer, if a property just came on the market and you expect that there will be multiple offers, best to start at the asking price because if there are a half a dozen or more, some listing agents (not me) won't even respond to you. Really.

Also make sure your offer is fully documented meaning proof of funds, pre-approval letter and the terms are standard for the area. If your purchase is contingent on the sale of your current property, disclose that. It doesn't mean that your offer won't be accepted. Also be very precise about the financing terms you indicate.  While there is nothing wrong with ultimately deciding to put down more than you indicated and finance less, it doesn't  work the other way. If, for example, you say you are going to be financing 80% and then decide to only put down 90%, and your loan is turned down you can not use that as a reason to get out of the deal.

As a buyer also make sure that you are working with a well regarded and respected local agent. I can tell you that there are instances where I get deals for my clients when they are not the highest offer because our offer was cleaner and other agents like to do business with me.

Lastly, whether you are buying or selling Real Estate, remember that none of it is personal, it is a business transaction. Treat everyone with dignity and respect. There can only be one buyer for each listing and even if you miss out on this one, the right one will come along.

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