Saturday, June 20, 2015

What determines the offer a seller accepts?

In a housing market like Brevard County, Florida where there are more buyers than sellers and multiple offer situations are common it is often a challenge for a buyer to formulate an offer strategy.  After all, buyers want to get the best house for the best price.  But knowing how to create an offer a seller can't refuse is a challenge.

The title question is simple.  The answer, not so simple.  

The correct answer is the highest price, right?

Wrong.  It is not always the highest offer.

Well, then it must be the cash offer if the others involve a mortgage.

Wrong, again.  Cash sometimes motivates sellers but a mortgage results in cash as well although it may take longer or potentially a few more hiccups to closing.

Well, it is the first offer to arrive, right?

Wrong, once again!  Still, an offer should have a short response due by time to limit the possibility of more competing offers arriving before a decision is made.

So what determines which offer a seller accepts? 

Every seller is different so there is no one answer that fits all.

Sellers differ on circumstances (regular sale, estate sale, short sale, relocation due to employment).  Each of these types of sale can create time issues, sale prices, urgency (or not), etc. Seller attitudes can differ greatly from "Let's just get it sold" to "I am not giving this house away!"

So what can buyers do when they want the house but know the competition is keen in a housing market like Brevard County, Florida?

Your buyer's agent will reach out to the the seller's agent regarding the existence of potential offers and any other information they can obtain about the seller/property (time line, circumstances, flexibility, terms, etc.)  But don't expect the seller's agent to provide any information that would weaken a seller's position.

So which offer will the seller accept? 

No one knows for sure.

With the known information, a firm (realistic) understanding of the budget and the competition, buyers should formulate their offer.

In the current Melbourne, Florida real estate market where multiple offers are common buyers should guard against an emotional bidding war and tender an offer they can live with regardless of outcome.  

I suggest prospective buyers consider the whole package and not just price when the offer is put forth.  Include supporting documentation with your offer (pre-approved mortgage from local lender).  Make closing dates reasonable (maybe 45 days maximum if a mortgage is involved).    Include only the necessary contingencies to protect yourself in case of a bad inspection or appraisal.    Don't request concessions (closing cost assistance) if it can be avoided.

Give it your best shot.

If you are ready to buy a house in Melbourne, Florida, please give me a call at 321-693-3850 or send me an email.

Image courtesy of Stuart Miles at