It might come as a shock to you but multiple offers are back in the picture again. Well-priced homes are the targets, most often in the larger town homes or entry-level detached homes. Why that price range? Because there are three groups interested – first time buyers, investors and former short-sale owners returning to the purchase market. Here are a few pointers from the buyer’s standpoint.
1. Run the comparable sales and active listings in that price range and area. You must know what the market value most likely is. Why would I say this? Because the home maybe overpriced or under priced. or is maybe the only property for sale in that range. Here’s a real-life example: last week in Laguna Niguel, a detached view property was listed at $430,000 as a short sale. Since the true market value was clearly $500,000 or more, the agent received fifteen offers in the first two days. All but one of the offers exceeded list price.
2. Have your financing as solid as humanly possible. The pecking order is first cash then 20% conventional, followed by 10% conventional, FHA and VA. Also keep your lender letter updated and have proof of funds readily available. Consider the possibility of gifts from family.
3. Place backup offers on pending properties. Many short sales will fall out and become available. If your offer is ready and waiting and your agent is communicating regularly with the listing agent, you may be accepted without competition.
4. If at all possible, meet with the listing agent in person and if possible meet the seller. In 2003 and 2004 we used to have our buyers write a letter to the seller explaining how much they loved the home. In the case of a short sale the seller wants a buyer that will stay the course. That is almost more important to the seller than the price.
5. Use a full time Realtor® with a good grasp of the market and a good reputation.
6. Luxury properties are much less likely to have multiple offers but it can happen when the property is unique and well-priced.