Home Buying Tips | How To Deal With Multiple Offers

Learn How To Deal With Multiple Offers When Buying A Home

A multiple offer situation can develop on almost any property in almost any market. While multiple offers are usually associated with seller's markets, home buyers should be prepared to compete with other buyers in any type of market.

Why? If you have found a home that you like and is priced right, then so has someone else. In fact, the more you like your home the more likely it is you will be competing with other buyers. This is especially true in buyer's markets where a home owner issues a large price reduction. As soon as that price change hits the multiple listing service (MLS), every buyer who had seen that property and liked it but could not afford it is now back in the market.

So what do you do to compete against other buyers in a multiple offer situation and win? Follow these guidelines and your odds of success are greatly increased:

1. When you find a home you like, get it under agreement immediately.

   You will get an opportunity to do a home inspection which gives you 7-10 days to decide if you really want to buy this home. Get your offer accepted first and then take the time to make sure it is the right decision. Otherwise, while you wait other buyers will step in.

2. Include a large Earnest Money Deposit.

   The size of an earnest money deposit (

3. Make Sure You are Pre-Approved for Your Loan.

   Sellers are justifiably skittish about selling to unqualified home buyers. Obtain a full loan commitment from your lender subject only to appraisal and title. In many cases, sellers will ask buyers to make their mortgage contingency subject only to appraisal and title, not their approval. Under this scenario, the buyer gets their deposit back if the appraisal comes in short but loses it if their approval falls through for any other reason.

4. Be Flexible on Timing

   The sellers may need time to move - offer to give them whatever time they need to close and if necessary time to move after closing.

5. Dump Inspection Contingencies

   This can be risky but one way to achieve this is to bring a home inspector with you immediately, complete an inspection on the spot and then submit your offer without any inspection contingency.

6. Offer the highest price you can justify up front.

   Do not expect you will get any chance to negotiate. Very often there are multiple offers because the home is a great deal anywhere near the asking price. For example, if a bank is selling a foreclosure 25% below market value, does it really matter if you pay the full asking price or even a little more? You are still getting the property well below market value.

7. Be willing to be a back up offer.

   Purchase transactions resulting from multiple offer situations fall apart just as much as for normal transactions. If you have the time to wait, being a solid number two back up offer gives you an even chance of ending up with the property.

While you may face many competitors, remember that someone ends up winning in these situations. Taking the steps above can give you a better chance to come in first.

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