How To Win in Multiple Offers, as a First Time Home Buyer!
I was recently able to help some friends find their first home, well I didn’t really find it I just opened the door so they could see it in person. It isn’t uncommon for a buyer to find the house before they bug their favorite agent. A lot of times I don’t hear from my clients until they’ve almost made their minds up, sometimes that makes things more difficult and sometimes it just works out because it was supposed to. Most first time home buyers don’t have it as easy as these ones did. We only looked at two homes and the second home was the one they wanted….And so did everyone else… We submitted an offer and were promptly notified That the seller had received 11 offers. With a first time home buyer this is the nightmare that keeps people on the fence or deciding to just rent and forgo the wealth that can be created in a good rel estate investment. We’ve all heard the horror stories about the all cash offer with no inspection that went for hundreds of thousands of dollars above list price. Not much difference here. The thing that stands out to me is I am incredibly blessed to have so many relationships built on a solid foundation of trust.
We had a bit of time to sharpen our pencil and make sure that we put forth our best offer. This is a small older home, that had been carefully maintained and updated by a few different owners. My client is in construction and was able to quickly evaluate the home, and assess the risks of waving an inspection. While I never recommend waving inspection, I’m not opposed to it so long as I know that my clients understand the risks and are prepared for any potential consequences. In this particular case I felt it was warranted as I myself would even consider waiving this inspection. The home appeared to be under priced, and its still difficult especially for a first timer to offer above list price, because it feels like you are overpaying, when the seller appears willing to accept less.
My clients parents are also good friends whom I have earned of the trust of over the years. We had a lot of discussions about the potential value of this home, and it being early spring we did not really know what the housing market was going to look like when It crawled out under the rock protecting it from this PNW winter. This left us to make certain assumptions. I really had no data or comparable sales to use as a basis because there was literally NO inventory or closed sales to look at for this house. Something told me the house was going to sell for around $350,000, this being one of the last affordable homes In a decent neighborhood of King County.
My clients decided to put forth an offer just under 350k. No inspection, and they agreed to bring additional funds to closing if the home did not appraise. Nothing crazy, just a bit of money to make sure the seller knew we were serious and we weren’t going to let the transaction fall apart. It turns out that out of the 11 offers five of them were for 350,000 and another one was significantly higher however the listing agent was uncomfortable with the way it was written and the buyers ability to close. I’m not exactly sure why that was however I do know when receiving offers that are not well written or leave you to decipher what they meant because of poor verbiage, you tend to look past their crazy price especially when the offer leaves too many ways out for the buyer. After all we’re looking for a win-win transaction at all times, and never a win-lose.
After several conversations with the sellers agent regarding my clients and our offer the seller elected to sign our offer. If it were not for the trust that my clients placed in me regarding my opinion of value and what it would take to make this their new home, we would’ve never prevailed especially when there were at least five offers that were higher than ours. I truly pride myself and removing a lot of the frustration from this process not dragging my clients through the mud to get them what they want. In this particular scenario my clients bought a home with a tremendous amount of competition. The very first offer that they wrote was excepted, and our team managed to get the transaction closed so they could become homeowners for the very first time. You can’t make this stuff up, and it may never happen again. When someone places they’re trust in me to guide them through what is typically the biggest purchase they have made, I take that very seriously. Without amazing clients and relationships that are built on trust it’s hard to pull off a hat-trick like this.
If you are considering buying or selling in this market the best thing you can do is hire someone you can trust. It really never matters how good a broker is or how much you trust them, until you need it. One of the things I’m always doing is planning for the worst and hoping for the best. My goal is to be proactive and look at the big picture to make sure we are setting ourselves up for success and preparing for any potential issues that may arise. When things get rough or there are challenges presented in a transaction, being able to trust the person helping guide you is of paramount importance. This process can be extremely stressful and it can be extremely exciting, like riding a wave…
If you trust the team guiding you through this, to you always look out for your interests first, and be 100% capable of navigating to your desired result, then it doesn’t have to be such a roller coaster.