Buyers are confused and frustrated right now. They find a home in this “buyer’s market,” only to find out there are 15 offers on the property, and most are more than asking price. So how do you make your offer stand out from all others? The highest offer does usually get it, but not always. Here are some basic guidelines, but keep in mind that each Seller is different, so none of these are guaranteed 100% accurate all the time.
First, for bank-owned and short sale listings, they won’t even consider your offer, no matter what the price, if you have to sell your home first. so don’t even try. They MAY consider a contingency on a close if you are a solid buyer and are close to closing.
Next important would the the “net” price to the Seller. For the most part, distressed Sellers don’t care about what credits/fees you ask for. they run it through a spreadsheet and see how much they are left with, and they will usually (but not always) choose the offer with the highest net to them. So to most Sellers, $200K minus $10K in credits is the same as $190K offer. BUT if you really don’t need the credit, probably better to just write it at $190K so it’s a “cleaner” offer and that also reduces the risk of appraisal problems.
Next would be the amount of your down payment. If two offers are a similar net to the Seller, they will probably choose the one with the most down payment. Buyers with more down are more likely to be approved for their loan, and it can also make the appraisal process easier. If one buyer is 3.5% down and the other is all cash, but the all cash offer is 10K less than the 3.5% down buyer, the Seller, most often may take the all cash as more of a “sure-thing” even though it’s a lower net. And then there are your inspections and closing time periods. Most distressed Sellers want the shorest possible time periods for you to inspect the property and then closing escrow. Usually 7-10 days for inspections and 30-40 days maximum for closing escrow.
**Information above is provided by REFERRAL REALTY, each purchase case is different, there’s no guarantee norm.
If you have any questions on the bidding process in today’s market, please give me a call.
1601 S De Anza Blvd, #150
Cupertino, CA 95014
408.996.8100 x 316 (v)
And check this BLOG frequently as I have market newest information from time to time.