Home Buying in 78717>Question Details

Meilinboss, Real Estate Pro in Austin, TX

Multiple offers situation in house buying

Asked by Meilinboss, Austin, TX Fri Feb 1, 2013

Hi all,
I know there is no magic number but can a few of you help me with how much "in thousands" over the asking price should I "tweak" my offer for in order to win? There is currently two offers, mine and the next buyer but there may be more before the cut off time. I am putting down about 37% down payment.

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Meilinboss’ answer
Hi all,

Thanks to all who have answered. Well, my realtor and I bid $6000 above asking price but still "lost." (Maybe). The listing agent will not tell my agent why the seller is going with the other offer (obviously offerd more than $6K). However, the deal is not sealed yet as the other buyer wants a few things (again, unmentioned by the listing realtor) and now currently under "negotiation" as we speak, 3 days later.
0 votes Thank Flag Link Mon Feb 4, 2013
If you know the other offer has been accepted by the seller, why dont you ask to have your offer as a Back-Up offer just in case the other buyer has a problem with financing. I have used this tactic before with success. The waiting to find out if the first buyer can close is difficult, but it can work sometimes. I wish you luck on your purchase!
0 votes Thank Flag Link Sat Feb 9, 2013
Hello again Meilinboss,

You have gotten a lot of good answers in this forum. Have you received any feedback from your offer? I and several others I'm sure would all like to know if you got the property?

Claire McIntyre, Architect / Real Estate Broker / Builder
512 699 9912
MMI McIntyre Associates
Real Estate Brokerage http://www.mmirealestate.com
claire@mmirealestate.com
McIntyre & McIntyre Inc
Architecture / Engineering
Project Management http://www.mmibuildings.com
0 votes Thank Flag Link Mon Feb 4, 2013
There is no perfect answer for this question. I would try to make an offer they won't want to refuse. That means don't ask for them to pay for everything related to the purchase: title policy, survey, Buyers closing costs, home warranty, etc. Asking for all those things brings down the amount they will net from the sale. Also a really nice house with multiple offers will often sell for a few thousand more than the asking price. The key is if you are financing the purchase, you need to make sure that it will appraise for that price or the bank wont write the loan. They want to be sure their investment in you/the house is covered.

Have you agent ask what will work for the sellers, when would they like to close? Do they need a lease-back? Try to make your offer look better than the others and cross your fingers! I wish you the best of luck!

Sincerely,
Betina
0 votes Thank Flag Link Mon Feb 4, 2013
Hi Meilinboss,

Wish there was a magic number but price is just one factor. Purchase terms and type of financing are another. Have your buyer's agent find out as much from listing agent as possible about motivation of seller and close date desired. Try to meet those.

If financing is a must submit a pre-approval letter (not just a pre-qualified) for a stronger financing contingency offer. It's hard to compete with a good price cash offer. Find out from your lender the soonest they can close purchase for you and submit as early a closing date as possible if seller wants a quick close.

Have your buyer's agent take a close look at comps in the neighborhood to gauge value. If you are looking at a long term hold then paying more than current comps may be okay. This gets to the how bad to you want it factor.

If this is a HUD property or bank REO then you need an agent familiar with these transactions.

Sometimes you win, sometimes you just move on and find something better!

Best of Luck,

Claire McIntyre, Architect / Real Estate Broker / Builder
512 699 9912
MMI McIntyre Associates
Real Estate Brokerage
http://www.mmirealestate.com
claire@mmirealestate.com
McIntyre & McIntyre Inc
Architecture / Engineering
Project Management
http://www.mmibuildings.com
0 votes Thank Flag Link Fri Feb 1, 2013
Depends on several factors including market analysis *for that neighborhood or area, inventory, demand, terms (seller vs buyer motivation) and ultimately the intangible question will be "how bad do you want it?" Is it a home that doesn't compare to others (in your heart), will you regret if you lose it?

Regardless, you should consult with a professional buyers agent who understands the market and can advise you contractually "numbers wise"
Contact me to reassess and submit a winning offer.
0 votes Thank Flag Link Fri Feb 1, 2013
It's not only the price that matters, it's the terms as well. If you can find out the sellers motivation and needs you can strategize around that. The other factor to consider is the property needs to appraise, study the comps with a professional while crafting your offer.

Chris
0 votes Thank Flag Link Fri Feb 1, 2013
To get the seller's attention consider the following:

1. cash buyer if possible

2. quick closing date

3. no contingencies

4. If financing is essential, be sure to include a "letter of pre-approval" in your offer package

Hope this information is helpful...

Good luck,

Bill
0 votes Thank Flag Link Fri Feb 1, 2013
Think about removing your financing contingency and raising the price. The last 3 multiple offers I had went for over asking price and one was 15% over asking price with all cash paid.
0 votes Thank Flag Link Fri Feb 1, 2013
Melinboss,
Pretty homes sell above list price and often above the projected market value.
Ugly homes rarely get invited to the dance and any offer will be accepted. Think sink hole.
-
Offers free of poison pills such as "appraisals" are more appealing.
Quick close with no preconditions are more appealing.
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Without knowing if you are buying the ugly duckling or the prom queen, if you are buying via the 'first look' or competing with the investors, there is very little fabric with which to work to provide meaningful direction-
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If you want the house, you will need to be bold.
If you are a dabble in your attempt to purchase, tweak your offer.
-
We simply can not tell what you are attempting to buy, what your purpose for buying, what your capacity for buying or your experience regarding real estate purchase.
-
You really, really need to get a pro on your side, or start listening to the one you have.

Best of Success to you,
Annette Lawrence, Broker/Associate
Remax Realtec Group
Palm Harbor, FL
727.420.4041
http://RealEstateMadeEZ.us
0 votes Thank Flag Link Fri Feb 1, 2013
The cleaner the offer (the less you ask for - short option, quicker close, etc), the more the odds improve.

As far as a big number (assuming the value is supported), talk with your agent. I like to think at what point would I be disappointed if I lost. For example, the list price is $100,000. If the other side went in at $101,500 and I had offered $101,000, would that be a bit painful? I find it better prepares me for a loss as I've given it my best effort.
Web Reference: http://www.crowehomes.com
0 votes Thank Flag Link Fri Feb 1, 2013
Hi there. I really would love to tell you that there is a "magic" number, but honestly when you are bidding blind there is not. What I can tell you what has helped me is this. Have your agent (presuming you have one, if not, I would be happy to just pull the history for you--No I do not want in on your deal, just trying to help) pull all history of property. Has it sold before? Is this a foreclosure? What has sold around this property in the last 7 months and put all of those numbers together. My Philosophy is when bidding a Multi , it isn't so much what the asking price is...That could be anything...It is more of what is the most you are willing to pay for it. I know that is vague, but it is true. You set a number in your head that you do not want to go over and bid there. I would rather put in my best bid, the highest I am willing to go, and leave it there. You will never know if you over bid (usually) but at the very least you will be comfortable knowing that you did your best, and if you lose to your best, then that is ok. But if you do not bid your best....And you lose, you will always carry around that "If I only would have gone $1K more. Does that make sense? Best of luck to you and one last tip. Don't ever assume that because an asking price is such and such and you put a 5K over ask and expect that should do it...It doesn't work that way. I have seen bids go WAY over. But in what works best for you! And you can't lose. (The house maybe, but not what works best for you). Take care and do let me know if you need something pulled I have a little time today, but not a ton.

Shannon
0 votes Thank Flag Link Fri Feb 1, 2013
I sympathize with your situation. It is tough to really want a home, and there is a possibility that you might lose out. It is tough to answer your exact question. How is the home priced compared to recent sales? What is the total price? Will there be appraisal issues?

You have a sizeable downpayment which is helpful, but you still might lose out to a cash offer. I would say having an option fee with a decent amount(perhaps $500) and a short time frame(7 days) and be willing to accomadate the closing date with whatever works for the seller.

As for a dollar amount above list, you and your agent will have to discuss what is best.(saying you will do the appraisal quickly might help)
0 votes Thank Flag Link Fri Feb 1, 2013
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