Surviving Multiple Offers: Strategies for Buyers and Agents

In today’s competitive market, surviving multiple offers is a challenge for both buyers and agents. With low inventory and high demand, buyers must act quickly and strategically to secure a home. This episode provides practical advice on writing winning offers, communicating with listing agents, and guiding clients through the process. Whether you’re a new or experienced agent, these insights will help you navigate multiple offer situations with confidence.

Why is Inventory So Low?

Several factors contribute to the current low housing inventory:

• Homeowners Holding Properties: Many homeowners choose to keep their first homes as rentals instead of selling when they upgrade.
• Increased Investor Activity: More investors are purchasing properties, reducing the number of homes available for owner-occupants.
• Slow New Construction: Builders have not returned to pre-2008 construction levels, and material costs remain high.
• Generational Demand: Millennials are reaching home-buying age, increasing competition in the market.
• COVID-19 Impact: Some homeowners delay selling due to health concerns or uncertainty about moving into retirement communities.

How to Prepare Buyers for Multiple Offers

Before showing homes, set clear expectations with buyers about market conditions. Key points to discuss:

• Speed Matters: Homes sell quickly, so buyers must be prepared to make decisions fast.
• Pre-Approval is Essential: Buyers should have full pre-approval, preferably from a reputable local lender, before viewing homes.
• Shop Below Budget: If multiple offers are common, buyers should look at homes below their max price to allow room for competitive bidding.
• Understand the Market: Show buyers recent sale trends to help them make informed decisions on offer amounts.

Writing a Winning Offer

To stand out in a multiple-offer situation, consider the following:

• Submit a Clean Offer: Avoid unnecessary contingencies such as home warranties or seller-paid closing costs.
• Shorten Contingencies: Reduce inspection and financing deadlines to appeal to the seller.
• Offer Competitive Earnest Money: A higher deposit demonstrates commitment to the purchase.
• Include an Escalation Clause: This ensures the buyer’s offer stays competitive without blindly overbidding.
• Limit Appraisal Contingencies: If possible, buyers can waive the appraisal or agree to cover a gap if the home appraises below the offer price.

The Role of the Listing Agent

Listing agents play a crucial role in ensuring a smooth transaction. Best practices include:

• Updating Realtor Remarks: Clearly state if there are multiple offers, deadlines for submission, and any seller preferences.
• Providing Clear Guidelines: Outline preferred closing dates, possession terms, and any reserved items.
• Prompt Communication: Keep buyer agents informed to manage expectations and reduce unnecessary calls or emails.

Managing Buyer Expectations

Buyers can easily get discouraged after losing multiple bids. Encourage them to:

• Stay Patient: The right home will come, even if it takes several offers.
• Consider Timing: If they’re struggling, they may want to wait until the market shifts.
• Evaluate Alternatives: Renting for a short time or saving for a larger down payment may improve their chances later.

Legal Considerations: Love Letters and Fair Housing

Buyer “love letters” to sellers can be a fair housing violation if they reveal personal details about familial status, race, religion, or other protected characteristics. Agents should educate buyers on the risks and focus on presenting strong financial and contract terms instead.

Final Thoughts

Surviving multiple offers requires preparation, strategy, and strong communication. By educating buyers early, writing competitive offers, and working collaboratively with listing agents, you can navigate this competitive market successfully.

For more insights, listen to the full episode of Hustle Humbly and visit Rate This Podcast to leave a review. Have a topic suggestion? Email us at team@hustlehumblypodcast.com.