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Multiple Offer Situation
Today, we’re going to talk about multiple-offer situation. Stay tuned to the end and I’ll give you an update on the latest market trends here in San Antonio.
So, what does it mean to be in a multiple-offer situation on a property? Well, that means that multiple buyers are interested in the same property that you are. So, how do you win in that situation?
#1 Have Financing Pre-Approved
First of all, you’re going to make sure that you have all your ducks in a row and that you have a pre-qualification or even better, a pre-approval letter. Put in your best foot forward. When you have a multiple-offer situation, you want to put in your highest and best offer. That doesn’t necessarily mean that the highest offer is going to win the bid, but what that does mean is the offer with the best terms is going to most likely win.
#2 Put in your BEST offer
Number two. The next step is to look at the actual sale price of the home. Is it priced fairly? Is the price high for the market, right on the button, or is it priced low for the market? If it’s priced low for the market, most likely the house is going to go for full asking price or maybe even slightly over asking price. The main thing you want to take into consideration is will the property appraise. Even if you put in an offer at or over selling price, that doesn’t mean that you’re paying over the value of the home. As long as it appraises, you’re well within the price range that you should be offering for the property.
#3 Loan type advantages
Number three, the next step is to really look at the loan types and how those come into play. Cash offers are always king, so if you have the ability to pay cash, I would suggest you do so in a multiple-offer situation. If that’s not possible, then you’ve got conventional loans, FHA Loans, VA loans, and so really those are the pecking orders when it comes to that type of loan. The conventional loans usually require a little bit more down when it comes to the offer. So, the higher, your down payment will always look more attractive because you’ve got more skin in the game. Secondly, FHA Loans are often used when a buyer can’t qualify for a conventional loan. That doesn’t necessarily mean it’s a bad thing, but the terms might be more attractive for a conventional loan over a FHA loan. Lastly, here in San Antonio, we have a lot of military and there’s a lot of people trying to win bids with a VA loan. So, the VA loan, the one discrepancy about that compared to the others is that the VA often require specifics when it comes to repairs. So, if there’s multiple-offer situation and different types of loans in play, they may not select a VA loan because there’s a risk that there could be more repairs required.
Make it easy for the sellers to accept your offer over other offers. Make the terms as simple as possible. If you don’t have to worry about a specific move date, then make the close date flexible for them, and also make the terms more flexible. Offer more and your earnest money or a shorter option period of time. Those are all factors that a seller is going to look at when they’re comparing the different offers together.
#4 Make it personal
Number four. Make it personal. A lot of times, people have lived in their home for quite a while and they’ve become attached to it. So, if you can put in a personal letter maybe with some family photos that shows why you like their home and why it’s going to be a great place for your family, sometimes that helps pull heartstrings and makes them look at your offer more attractively than other offers.
#5 Your agent’s communication
And number five, make sure that your agent is communicating effectively with the listing agent. You want someone that’s going to bat for you, that’s going to be fighting for this and also communicating your benefits over other buyers in this situation.
Okay. Let’s talk about contingencies. If you have a home to sell and you are putting in a bid on a home with multiple offers, it can be less attractive because there’s risk that your house won’t sell. So, the best thing to do is to wait until your house is on the market and preferably under contract and out of the option period so that the sellers can be sure that your home is going to sell within the time frame and that you’re ready to go as a buyer.
San Antonio Market Trends
Okay, guys. Here’s the latest update on the market trends in San Antonio. The market here is still extremely strong. The Texas economy has people moving in from all over. That’s not changing, and our business is growing. So, that means the housing market here in San Antonio is still very strong. Our inventory here is also very tight. That means there’s less homes and more competition. So, be prepared. At this time of year where we’re halfway through the season, the busy season when many people want to move, you’ve got multiple-offer situations like I mentioned before. So, be ready for housing that is limited and be ready for offers when the time comes, and just be prepared to make that move as quickly as possible. Most closings take 30 days, so be prepared if you’re putting in an offer now. You’re looking at a 30-day close.
Another statistic from 2018 was the back half had 44% of homes that were actually offered over asking price. I think that we’re going to well blast that, again, the back half of this year because, again, our market is very strong and we continue to have growth in the area. A balanced market between a seller’s market and a buyer’s market is about six months of inventory. In San Antonio, we have on the lower three months of inventory. So, that means there’s more competition and there’s less property on the market.
San Antonio is a great place to be buying or selling a home. We have great market values and the prices of homes continue to increase, so your property equity is going to continue to grow for well into the near future.
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