How to Win in a Multiple Offer in Georgia

If you watch my last video, you know how competitive it is right now in the Atlanta market and, frankly, all over the United States for buyers when they are trying to buy a house. So how in the world do you compete against 15-20 offers? And how the heck do you win? Stick around! I’m gonna share with you five things that you can do to beat out multiple offer situations. I’m gonna share with you a bonus tip that is essential for you to beat out these offers.

So like I mentioned in my last video, houses are getting multiple offers on homes. It’s not uncommon to see anywhere between 10, 15, and 20 offers on houses. It can be very discouraging for a buyer to compete against those offers, especially if you’re a first-time homebuyer right now trying to find a place, and you’ve got to be asking yourself, how in the world can we finally get the home of our dreams? What are we going to do? 

Well, as I said, I’m gonna give you five tips today on what you can do and how you can structure your offer in positioning yourself in the best possible way that you can.

So let’s get to it. The first thing that you need to be asking yourself is, “Can you be a cash offer?” Now I get it. Most of us, including myself, are not in that boat which has two 300-500, 000 $ laying around just to go out and buy a house now. Most people can’t, but you would be surprised some people can purchase a home with cash, and they don’t necessarily need to be alone. Cash is king, and in these situations, you are competing with cash offers.

And It’s tough to compete against a cash offer. If you cannot accept a cash offer or you don’t have cash in the bank, there are solutions, and there are ways for you as a buyer to be a cash buyer here in Georgia. There are several different lending programs, precisely one is called homeward, which will allow you to become a cash buyer. They purchase the home on your behalf, you use their lending program for really competitive interest rates. We can go into much more detail about that one-on-one, but there are options and ways for you as a buyer to become a cash buyer. And It’s something that I strongly recommend to my clients to consider and to look into. We discussed at length to see if we can get approved with this program to make us a cash offer. That’s going to put you right at the top of a seller’s list because you put yourself in a seller’s shoes; if you had a cash offer with really great terms against someone that’s getting a loan, you as a seller want the guaranteed thing you want to take that cash offer. The second thing that you can do is come in with your highest and best offer first. 

This is not the time for you to think about negotiations or coming in a little bit lower waiting for a counter from the seller; no, you’re competing against 10, 15, 20 other offers. You need to present the most amount that you’re willing to pay for that home at the very beginning. If you’re not willing to pay that for the home don’t make an offer on the house there’s no need so come in with your highest and best that way that you know. If you are not the offer that gets chosen, you gave it your all, you gave everything that you were comfortable with paying, and you are okay with moving on to the next home, unfortunately, right now this market is not designed to allow for counters from sellers asking for more. They’re not going to counter back and say, “hey we’re calling for highest and best”, we’ve received multiple offers you need to assume that every offer that you present is going to be part of multiple offers, so come in with your strongest offer first that way you know that you’ve left everything on the table and if you don’t get the home you can walk away knowing that you gave it your best now.

The third thing I would consider you doing is in your offer include what they call an escalation clause so an escalation clause is just that it escalates your offer and your offer price. Should the seller receive an offer that’s higher than yours what does that look like say that you offer 250 on a home with an escalation clause and that escalation clause is going to say something like this should the seller receive an offer higher than this current offer that nets the seller more money then our offer automatically increases by a thousand dollars over that highest offer now you can leave that open with no cap or you can put a clause in that escalation clause that states that this offer caps at 265. That’s something to consider that escalation clause is great knowing that you’re going to be up against multiple offers if you want to have the opportunity to increase your offer based upon other offers. If there’s something else better out there for the seller, something to note here, not all listing agents like escalation clause some listing agents will tell the buyer’s agents, “we are not accepting escalation clauses, just give us your highest and best first”, which is what I was talking about earlier. 

Make sure that your agent is reaching out to that listing agent to find out what is important to the seller that leads me to my next thing of how to make your offer competitive. That is finding out what is important to the seller. Your agent should be reaching out and having that conversation with the seller’s agent called the listing agent questions that your agent should be asking. They are outside of price, what is most important to your seller you would be surprised at what is important to sellers in the market that we’re in right now. It’s not uncommon for a lot of sellers to need what they call a temporary occupancy agreement, meaning that allows the seller to stay in the home after closing. This may or may not be something that lines up with your timeline and your ability but if you have a flexible timeline let’s say that you know that your lease is ending at the end of July, but you’re house hunting now, and you have that flexibility there, and if the seller needs more time in the house, you can present a firm offer with a stipulation in there saying that you will allow the seller to rent back the home from you as the buyer until the end of whatever date.

One thing to note about temporary occupancy agreements is that most lenders will only allow 60 days of temporary occupancy agreement for the seller meaning that you must take possession of that home within 60 days. So make sure that you check with your lender on that before you know about putting in a temporary occupancy agreement. After that sometimes it’s imperative for a seller to close very quickly. They need to get out of the home as quickly as possible. With that, you can work with your lender to make sure that you can close on your loan fairly quickly. Many lenders can close loans in as little as 14 days depending upon the appraisal. Sometimes it’s vital to the seller to use a specific lender or specific closing attorney in the state of Georgia now.

Technically, those are things that you get to choose as a buyer. Still, you can find out from the listing agent if those things are super important and your offer has all of those things that the seller is probably going to give your offer priority all things else equal, so equal price equal other terms. You know that might be the thing to push your offer over. It’s also imperative that your agent has a really great reputation and has a really great lender reputation as well. I can’t tell you how many offers I receive as a listing agent where the buyer’s agent never once reaches out to me. Those things are significant whenever you try to get an offer accepted and a deal to the closing table. It’s important to you as a buyer. It’s urgent to the listing agent and the clients that they’re representing that the listing agent’s job is to do everything possible to ensure a smooth transaction and make sure that that deal closes. Those things have a huge influence on getting that deal to the closing table. 

All right, the fifth thing that you can do, and this should be a given all of the offers you are submitting right now, you need to shorten or remove as many contingencies as possible. What does that mean so? Let’s talk about the due diligence period that is your inspection time on a home. You can waive your due diligence period and create that as zero days in the contract. I know what you’re thinking you’re thinking, “Sarah, I need to get my home inspected. Who would ever recommend waving a due diligence period?” Hear me out during the due diligence time period as a buyer you can back out of that contract for any reason. It doesn’t have to be because of the home inspection, it can be because you got cold feet and it can be because you found another home that you like better. As a seller, they want that time period to be as short as possible and why do they want it to be as short as possible. Well, because you can back out of the contract by setting that time period as zero days, what that tells the seller is that you are not going to back out of this contract just for any reason. What you should do if you’re going to put a zero day due diligence, is that you should add a stipulation in there that gives you the right to inspect the home and the right to request repairs for a period of time. So for my buyers, right now what that looks like is that we are writing in their zero days due diligence and we have five days right to inspect the home and right to request repairs so you still have an opportunity to have the home inspected. You still have the opportunity to come to an agreement on the repairs and of course you’re going to want to put something in there that protects your earnest money so that if you can’t come to an agreement on those repairs that you have the ability to back out of the contract and get your earnest money back. That’s a way to set yourself apart from the other offers. 

Another thing that is very common right now in this market is waiving appraisal contingencies anytime that you have a loan the bank is going to order an appraisal because they want to ensure that the amount of money that they’re loaning on the home is worth that amount often what we’re seeing right now is listing agents and sellers. They’re getting multiple offers 10, 15, 20 offers all of those are over asking price not all but in multiple offer situations. Likely the winning offer is substantially over the asking price whenever you’re going over the asking price you need to make sure that your loan can support that amount and that the home is going to appraise for that amount more times than not right now. Currently, in this market we are seeing problems where there’s an appraisal gap so let’s use that 250 house for an example. Let’s say that the winning bid or the winning offer was 265. The listing agent is going to say “Great! You’ve offered 265,000 for this house”, but what are you going to do as a buyer if that home doesn’t appraise at that 265 price. Let’s say that that home comes in at 255. In a normal market, going back two and a half years ago you might have a situation where the appraisal comes back at 255. You have a meeting of the mines you talk to the seller and in all likelihood the price of the home would just be reduced to the appraisal price. 

Well, that’s not happening right now in this market because sellers have so many choices in the offers that they’re getting on their home. So a lot of buyers are writing into the contract they are covering that appraisal gap that means that using that example we wrote an offer for 265 the house appraises at 255. That means that you, as a buyer, are going to have to bring an additional $10,000 in cash to close out this contract. This is easier to accomplish if you are looking at a conventional loan and you’re putting a substantial amount of a down payment now a lender can work with you on running some different scenarios but what this looks like is that you would be kind of shifting some funds from your down payment to cover that appraisal gap. So let’s just say that instead of putting 15 down on your loan, that loan now kind of looks like a 12 down loan because you shifted some of those funds to cover an appraisal gap. This is not the time in this market right now to ask for anything additional in the contract, do not ask the seller to pay for a home warranty. 

Do not ask the seller to cover a termite Inspection don’t ask for anything extra if you’re competing with multiple offers. That is just one way that’s going to put your offer at the bottom of the list or in a separate kind of like no pile right now. Unfortunately, these are things that you’re going to have to work out on your own as a buyer with your agent to figure out a plan of Action for those things that you would normally ask for in a contract in a normal market. Now is just not the time, it’s simply way too competitive. So I promised a bonus and if you have not figured it out yet, you need a very experienced agent right now that you are working with to help you navigate this market and craft offers that are going to put you in a competitive situation. To compete and one way that your agent can help you right now is by finding properties that are off market. 

So what does that look like if you know that you want to live in a certain neighborhood? Get an agent that is going to call sellers in that neighborhood or call homeowners and say “Hey, I have a really fantastic buyer! They love your neighborhood and they want to live here!” Have you considered selling? You would not believe the amount of opportunities that there are out there to find buyer and seller matches off market. What is this going to do for you as a buyer? It means that you’re not going to have to compete with 10-15 other offers. You are going to get first dibs to present a really amazing offer for that seller to entice them to sell and not put their home on the market. Another way that your agent can work really hard for you is by networking with other agents to see of other upcoming opportunities that they may have and to kind of talk about pocket listings. 

Make sure that you check your Local and state guidelines on pocket listings, sometimes that practice is not allowed but the bonus tip here is that you need a really experienced hard-working agent; someone that’s just showing up showing you homes and writing whatever you tell them to in an offer and it’s not giving you really great advice is not the agent that you need.

If you need help connecting with a really great agent in your area make sure you contact me! I have great relationships with real estate agents all across the country and of course if you’re here in Georgia, I would love to be your real estate agent. I’m Sarah Maslowski with KeyPoint Homes by Sarah, the key to a great real estate experience.