With interest rates near record lows, many Boston Midtown real estate clients are making the decision to buy a Boston condos for sale. Here, in Boston Beacon Hill specifically, were experiencing a bit of an inventory shortage. What we’ve seen with those two factors combining is more buyer demand than seller supply, leading to a lot of “multiple offer” situations. Currently, I’m representing a buyer client who has now offered on 3 properties, missing out because of bidding wars that caused the selling price to be 10% above the list price. Keeping that in mind, here are some tips to help you snag your dream home when up against a multiple offer scenario.
– Well, cash is king right? If you have the ability to write an all-cash offer, this is the way to go. Loan approval is the #1 reason for deals falling out of escrow, so removing that risk from the transaction will set you apart in the eyes of the seller.
Pre-Approval / Proof Of Funds
– As with any offer scenario, I believe that it is extremely important to get pre-approved before you head out and start offering on properties. Having your pre-approval letter included in your offer shows that seller that you’ve already gotten the ball rolling on the loan piece and that you’re a qualified buyer. Attaching the “proof of funds” with your offer is great too because it shows the seller that you have the fund available to complete the transaction.
– If possible, offer to close quickly. 30 days is the typical turnaround time for an escrow. If it is a vacant unit that you are offering on, the seller is literally
losing money” everyday that passes. If you can shorten your escrow from 30 days to even 17 or 20, you could be saving the seller thousands, which they’ll appreciate.
– This is possibly the riskiest of options, but sometimes you have to pull out the big guns in a multiple offer scenario. The most common three contingencies are the “loan” contingency, the “appraisal” contingency, and the “inspection” contingency. The
loan” contingency is a contingency that is in place to protect you in case you cannot get the loan funded. This should stay in place unless you have the cash to back up your purchase price in a worst case scenario. The appraisal contingency is in place to allow you to back out, or re-negotiate, in the case that the appraisal does not cover the loan amount. This is a good one to remove if you’re offering on an under-valued property where recent neighboring comps assure you a solid appraisal. Or if you’re putting down 20% or more so that the loan amount is far below the purchase price. Lastly, the “inspection” contingency, this should really never be removed. The inspection contingency allows the buyer to poke and prod around the home and determine if there are any problems that might effect the purchase price of the home. Keep this in place.
For more information on writing an offer on a multiple offer scenario, feel free to contact us. We look forward to helping you find you home.