It’s no secret that the Austin real estate market is more competitive than ever! If you’re in the market right now, you’ll need a few strategies to rise to the top of the pack when there are multiple offers. In a regular market, multiple offers sometimes happen, but in this market – it’s safe to call them all-out bidding wars! A bidding war occurs when potential buyers compete against each other to “win” the property. A great strategy to increase the odds of winning the deal is to limit the seller’s risk.
Few or No Contingencies.
Contingencies provide the buyer with an opportunity to exit the deal if certain conditions aren’t met. However, they present a risk to the seller. Other interested buyers might have already moved on if a transaction unravels due to a contingency. Losing interested buyers might not be the case in our current market, but sellers still want certainty that a transaction will not fall apart once they enter into a contract. To improve the chances of your offer to purchase being chosen by a seller, include few or zero contingencies.
Get Approved.
Pre-approval provides your price range while looking for properties. Being fully approved eliminates the finance contingency from the offer to purchase.
Pay Cash.
Another way to remove the finance contingency is to let the seller know you will pay for the property in cash. A cash offer is often attractive to sellers if you have the resources and will give you an advantage.
Be Flexible.
Your REALTOR® can ask the listing agent if the seller has specific needs surrounding the closing date. If you don’t need to move in right away, offer to meet the seller’s terms for a particular closing date or offer a lease back at no cost. Flexibility could sweeten the deal for a seller if their move has been delayed.
Option Money.
Real estate contracts typically include a provision for an “option period.” The option period is when the buyer has the right to terminate the contract for any reason so long as timely and proper notice is given to the seller. Because a seller takes a risk by including an option period in the contract, buyers often compensate the seller. Option money is a small percentage of the home’s total cost that typically does not exceed $500. You can offer more option money to show the seller you’re serious about buying the property in a multiple offer situation. Keep in mind that the option fee is typically paid over the table directly to the seller and is rarely refunded at closing.
Omit the Option.
Because buyers can terminate the contract for any reason during the option period, it represents a high risk to the seller. If you really want to get the seller’s attention, you can opt to buy the home “as is” without conducting any inspections. This is NOT recommended as a general rule, especially for an older home. You cannot back out of an “as is” offer once the contract is signed, so only offer this if you’re financially prepared to fix problems with the property. Immediately purchase a home warranty if you choose to go this route!
Knowing the strategies to tweak your offer and make it more attractive to the seller will go a long way in a bidding war. We are backed by years of experience and can help buyers and sellers through multiple offer situations. Reach out to us, and we will guide you through the process. Sage Wilson Property Group | (512) 828-7074 | [email protected]
