The multiple offer is probably one of the most stressful situations for any potential home buyer. The whole process resembles a silent auction, where multiple buyers place offers on a home, with no idea of what the other is bidding. Generally, at the end of the day the winner is usually the one offering the highest price with the least conditions.
Here is a sample multiple offer scenario:
So you finally find your dream home. It's everything you've been looking for and you're ready to place an offer, but it's the weekend and the buyer isn't accepting offers until Tuesday. You meet with your agent and he explains that he's done some research and the home is under priced. Similar homes in the neighborhood are going for $385,000, but your dream home is up for $425,000. It looks like the listing agent advertised the home at a reduced priced to attract buyers. Your agent also mentions that he's heard there are four more buyers interested in the home. He advises you to bid high with the most you can afford.
You decide that $428,000 is the most you feel comfortable bidding. You remove all conditions except the home inspection and even mention that you are flexible about the closing date. You've already received pre-approval for the mortgage so the offer is not contingent upon financing.
You go view the home and notice that there are an unusual amount of people milling around; probably other potential buyers with their agents. This makes you nervous and you increase your offer to $435,000. You aren't totally comfortable with that number, but your financing is approved up to $440,000. The offer is finally submitted to the sellers agent.
After what seems like a life time (two hours), your agent gets a call that the seller is looking at two offers and yours is one of them! The other offer is less money, but is not requesting a home inspection. The seller is requesting that both of you come back with a better offer for consideration. Your agent advises you to increase your offer to $440,000 and remove the condition for a home inspection. Feeling rushed and under pressure, your emotions agree and you submit the new offer. A few minutes later, you find out you're the lucky owner.
It's great news that this buyer's offer has been selected, but you have to wonder if they are totally comfortable with the decisions they've made. More often than not, the potential buyer does not win the bidding war. Here are some things to look for to help increase your chances of coming out ahead.
1. You have to have an agent you trust and feel confident with. The agent's ability to come up with an accurate comparative market analysis is crucial when placing your offer. You need to believe you can count on them to give you an honest and precise account of the situation.
2. Don't make yourself crazy trying to predict the other offers. Place your highest bid based on an amount that you feel comfortable paying. You want to be able to sleep after you've purchased your dream home.
3. Place a clean offer, free of as many conditions as possible. Always get pre-approval for a mortgage so that your offer is not contingent upon financing. Only remove the stipulation for a home inspection if the seller has already had one completed by a reputable firm, or if you feel confident that there are no major structural or mechanical issues with the home.
Learn more about For Sale By Owner Maui Kauai homes at http://www.HomesByLender.com - a website with regularly updated.
For Sale By Owner listings in every state in the nation - buyers and sellers interested in FSBO can use this site as their primary source.