How To Win Against Multiple Offers

By Simon Natta • June 29th, 2009

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Just found the perfect home for you and your family, but not sure how to find your way through all the arrangements? We will help you with some useful tips in this article. For a worthwhile property, it is not unusual to have 15 or even more applicants in the competition, which can be very frustrating for an inexperienced buyer. I know this very well from my daily work with clients, being a realtor from Toronto for more than 25 years. Naturally this summary is not enough for a greenhorn to become a successful buyer, but in any case it can bring you some useful tips and prevent you from spending more cash than necessary.

Get pre-qualified

Prospective clients who can get prequalified for a bank loan always have a better chance of getting the deal than clients without a proper financial background. Don’t leave the seller in doubts about your financing. Without this, all the following tips are useless.

Find out the seller’s preferences

Knowing what or who the seller is looking for is crucial, because you don’t want to waste your time with a seller that has terms which you cannot meet. Thus we always suggest to our clients that they should try to get all the information available about the conditions of the home sale. It is better to give up in case you find out you are not able to meet them. However, if you can satisfy all the demands, contact your realtor and ask for help writing a letter to go with your proposal. This summary gives the vendor some information about you and focuses on your proposal’s pluses.

No low-ball, no even cut off marks

Now it is crucial not to propose an offer that is significantly below the fair price of the home, as this would probably make you an unsuccessful candidate and the seller would choose another buyer. Once you damage your reputation, it is not improved even after proposing a higher offer later. Thus the best way is to offer around $1,800 to $4,800 more than the highest estimated proposal. Let’s say the highest bid is thought to be $470,000. Try adding some cash and come to $473,164 – the offered price doesn’t have to be an even number!

Down payment

The usual, best looking amount of the deposit is between 10% and 20%. Later it is often possible to talk about the ultimate down payment price with the seller again, after you have closed the deal. The most important thing is the money you pay when the deal is closed so that you look like a solid buyer.

Earnest money deposit

The next method is quite aggressive but has some great results. Try to make the earnest money deposit as big a part of the down payment as possible (this deposit is not returnable if you back out later). You have to pay this money anyway, as the good faith deposit is included in the down payment, but it sends a strong signal to the seller. That way the seller knows you really mean to do business. This means that the earnest money deposit serves as a measure of your real interest in buying the home, regarding the fact that after signing the contract, you can usually change the amount of the down payment.

Offer free post-occupancy

In the summary accompanying your offer, offer a free-post occupancy agreement to the seller in case they need a week or two in the property after it’s been sold to settle their affairs. As this is a very solid proposal, it might be the last thing that makes the seller decide for your bid.

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