Real estate market is unpredictable because a property may remain unsold for weeks or get multiple offers at the same time. The buyers are bound to extra pressure as multiple offers have both advantages and disadvantages.
The real estate agents play a vital role in decision making while choosing between multiple offer situations as they guide the buyers to choose the right seller.
DC Fawcett reviews on multiple offer situations
Pre-approval and pre-qualification
The lender looks at the buyer’s financial overview and credit report. If the mortgage guidelines are satisfactory, the buyer is eligible to receive a pre-qualification letter from the lender.
Pre- approval requires much more detailing like a combination of credit report, lender information and bank statements which is a sort of mortgage commitment. Pre approval is essential and acts as a deciding factor for multiple offer situations on choosing the seller.
Financing are of different types which are conventional loan and FHA program offering loan scheme having strict guidelines. If the buyer has FHA loan approved, he would be obviously eligible for conventional loan. Depending on the mortgage, the seller should consider which buyer to proceed with.
Plans of the seller
It is must to know the future plans of the seller and it is the duty of the real estate agent to gather information whether the seller is planning to sell the property immediately or retain the ownership and give it out for rent. Then the real estate agents should make corresponding offer to the seller.
Deposit and down payment
If the buyer is keen on purchasing the property, he would go ahead and pay the security deposit to the seller. The amount differs from buyer to buyer and the seller now chooses the buyer who has deposited the larger amount.
Down payment will also attract the seller to choose you as he gets a perception that the buyer has saved a large amount of money for the down payment. The one who makes highest down payment will be favorable for the seller.
Decade ago, the buyer would go for home inspection only if the offer is approved and seller would show his property. Nowadays, home inspection may create an opinion in seller mind that you are keenly interested in buying and you will stand ahead of the other buyers. Do not skip home inspection as it is turning out to one of the contingency.
A piece of letter would actually have an emotional value and some sellers consider you during the “multiple offer situations”.
Bidding and closing date
When you know you are competing with 10 or more buyers, stay firm with your offer and terms. Make sure your real estate agent also convey the same to the seller and enquire about the closing date from the seller.
The scam may happen via a real estate agent itself stating that someone else have won in the multiple offer situation or pretends if there are multiple offers for the same property or telling you to bid the highest so that seller may choose you.
In order to prevent such scams, DC Fawcett, the real estate professional has started a virtual real estate investing club where blogs on multiple offers situations can be read by the investors.