Once you find out what are the seller need and the number of offers you should build an offer that match the seller requirement increasing your chance to get the offer accepted.
But make sure you do not make an offer you live to regret. Like an offer that is a lot higher then the market value.
Let me know what you think,
When I work with buyers, I suggest early in the game that they not fall in love with one home. Especially, if the market is hot and sellers are getting what they ask for. To turn the tables and the odds on the seller's market (and to better your results in the buyer's market) find your top three houses and write offers on all three at once. By this strategy, you can be more comfortable writing offers that are more aggressive under the asking price. What the likely outcome is, is you will have three counter offers to choose from. These shed light on what the sellers are really willing to do. Now your choice of the counter offer comes with insight and time. Nice way to counter act a hot market.
How much to offer in a mulitple offer? High enough that you won't be disappointed if your offer isn't accepted.
Kaye makes important points in considering the fact that if the property does not appraise, you, the buyer could be paying over appraisal and need to come up with additional cash funds to meet the LTV requirements for the lender. Also, don't get caught up with winning just for the sake of winning. A good agent can help keep you in balance.
Knowing the market as noted by Keith is a must as is having a good local agent who knows market value. Here's something to remember not all multiple offers are over the listed price. Sometimes if a home has been on the market for a long time you may see multiple low offers if the property is generally seen to be over market value. There are agents who deliberately price a property low to stimulate multiple offers. However there are many homes that are priced at market but have such a strong presence that they will generate offers over the listed price.
In any multiple offer situation you should know what is the most you are willing to pay for that property. Be realistic and discuss where the agent thinks the price may go.. an experienced agent will usually have an idea how people will bid. You must be OK with the idea that if your high bid is accepted the property may not appraise for that figure.. so you should have enough cash to make up the difference.
Here's another idea. Often people get too caught up in the idea of "winning" and make offers they later regret.. which is why properties that had many offers often wind up coming back on the market. It might be a good idea to present a backup offer on a property so that if it does fall out you have an offer that the seller has accepted.
Our office had a listing a few months ago that sold with multiple offers because it priced low intentionally. There are reasons that listing agents have for pricing properties. Assuming they are working for the seller's best interest, there are times when underpricing is preferred.
Regardless of multiple offers, if you know the market, you know the value of a given property.
A good agent will do a little detective work and can find out why the home is being sold, when they need to sell, etc. (if I am the listing agent...not from me...unless it is to my seller's benefit).
However, once you know those answers, then you can decide if you want to play the game. Depending upon your goals, if you just "have to have this house" in a certian neighborhood, and (recall the a home purchase is emotional), I ask my buyers :
1. How much are you willing/able to pay
2. What is the alternative if you don't get the house?
Sometimes (schools, it's a house right next to my best friend), you just go in a play your best hand. If I can arrange for the sellers to meet my buyers, then I have a better opportunity. I have the buyers write a nice, handwritten letter, with a family picture, not only a pre-approval, but approval letter that reads: if the house appraises, my buyers get the loan", no other contingencies.
Lastly, I insist on presenting the offer personally to I can answer questions the sellers may have and have the buyers vote of confidence to "make it work".
I want to also know the listing agent. That's why agents that are "in the market" like having transactions with me, because they know the quality of my work. Even if a "better offer" comes in, if it comes down to "who can close escrow" and "who can I trust", agent to agent relationships are key.