Buyers in this market are forced to deal with low inventory, increased competition, and yes, multiple offer situations. Many buyers and agents dread the multiple counter email they get requesting their buyers “best and final” offer.
Well fear no more! This is part 3 of 3 (read part 1 HERE and part 2 HERE!) in a series that discusses a few of the many things that you can do to position yourself above the competition. These strategies have been incredibly successful for me and my clients.
Tip #3 – Structuring an offer with the most competitive terms can make all the difference.
Yes, at the end of the day, the dollar amount has to be competitive, but terms are just as important when the offer amounts are comparable. A standard CAR Residential Purchase Agreement (RPA) has a number of contingencies in the contract. Timelines are associated with each contingency and can be determined by the buyer/buyer’s agent writing the contract.
Three of the main contingencies for buyers are the buyer’s inspection contingency, the appraisal contingency, and the loan contingency. If the buyer doesn’t choose to alter his contingency timelines, they will automatically resort back to the RPA default number if the contingency is checked.
An easy example of how you the buyer could make your offer look more attractive just by altering the terms would be if one of the offers you were competing against had a 17 day inspection contingency, the contract default, and your inspection contingency was considerably shorter.
The reason why this can make a huge difference is 17 days is a long time to wait for a seller to see if a buyer is actually going to be moving fwd to close. In a competitive market, 2 weeks, or even 10 days, isn’t nearly as attractive as a 7 day inspection contingencies I’ve seen recently, or 3 day, which is doable if you set up inspections in advance.
The same is true with the appraisal and financing contingencies, especially when competing against cash offers. This is why it’s imperative you are working with a good lender and the loan officer/mortgage broker is proactive and can work within competitive timelines.
My preferred lender at Movement Mortgage cannot only finish a buyers pre-approval in 6 hours, but can have my buyers completely approved in 7 days, which means incredibly short and competitive timelines if you happen to be competing against a cash offer.
There are a number of incredibly effective tools we use at TBG HOMES when structuring an offer in a competitive situation, such as escalation clauses, pre-inspections, and others, but we can’t give away all of our tricks of the trade.
To learn more about winning in a multiple situation, or if you just have questions about the market in general, please feel free to give me a call at 213-999-2843, or email me below.