The spring of 2015 has had more Multiple Offer situations than I can remember. The big difference this spring is that these multiple offers are not just at the entry price points, but all the way to the top of the market. 5 offers, 8 offers, 15 offers, one after another, property after property, sell and sell quick.
What does it take to win in this environment? I thought it would make for an easier understanding by breaking it down to the terms that sellers want, and in this market, expect.
Most sellers are looking for an AS IS deal with NO inspection contingencies. In fact, more and more sellers are furnishing a disclosure package that includes a pest inspection, home inspection, city inspection, and more. This takes the pressure off the buyers to try and inspect prior to writing an offer and at the same time levels the field.
Finance and Appraisal Contingencies:
First of all, over 30% of all offers these days are ALL CASH, so when competing against an all cash offer, it takes an offer with NO finance and appraisal contingency to win. This is often done by getting 100% through underwriting up front of writing an offer, and some times by providing asset statements that support the purchase price as if it was ALL CASH
In this market closing times are as fast as the money can arrive. In the case of an ALL CASH transaction this is in the area of 5 to 7 days. In a financed transaction this is in the range of 12 to 16 days. Bottom line, the lender and the buyer work together to move the required documentation back and forth as fast as possible, order an appraisal, and close fast. It is a team effort to close this fast.
In this market, offering the seller additional incentive beyond what has been listed above and exclusive of the purchase price is important. Consistently, buyers will allow the seller a RENT BACK and often times free of charge. Lenders will allow up to a 60 day lease back on mortgaged properties. Personal Property is another item that often sweetens the deal. Whether the seller wants to take everything or sell everything, being flexible on Personal Property makes a difference.
What wins these days is $MONEY$ and lots of it. Don’t be surprised to see a listing sell for 125% of original list price. So far this year I have heard and seen deals go for 200% of original list price. Properly researching past comparables, competitive information on the agents you are competing against, and researching the seller all helps in creating an offer that seeks to WIN! Bottom line though, if they want $MONEY$ you need to “Show them the MONEY”!
If you are looking to learn more about what it takes to win in a multiple offer, need a referral to a Mortgage Broker that has proven ability to make things happen, or are looking to sell and want to learn more about this in order to maximize your sale just give us a call. 415-990-8990 24/7