Multiple offers are common these days.  It seems like we've been here before... and we have... just a few years ago.  This time, however, it's mostly the foreclosure properties that are attracting more buyers and multiple offers.

Multiple offers often lead to a higher sales price and many disappointed buyers. If, for example, a home attracts 6 offers, then 5 of those potential buyers will be let down.  Obviously, only one buyer will win. And, it's not uncommon for some homes to receive 10-15 offers or more.

Most buyers end up having to write offers on many, many properties before they end up getting a home. Unfortunately, it may take several losing offers in order to "learn the lessons" necessary to compete in this market.

While there's never a guarantee that a buyer's offer will be the "winner," there are a few things buyers and their agents can do to increase their odds of being the offer selected by the seller (who in most cases these days are banks):

1. Be an ALL CASH offer. (yes, I realize this isn't all that easy for most people, but if you can buy with cash, you put the odds in your favor of winning - unless, of course, you write ridiculously low offers thinking cash will always win out... it won't).
2. Get pre-approved by a lender in advance (not just pre-qualified, but pre-approved which means your financial information has been more thoroughly reviewed by a lender).
3. Don't ask the seller to pay for a pest inspection or home warranty. While both of these items should be included when buying a home, the buyers can pay for these themselves.
4. Shorten your inspection time periods.
5. Put down a strong deposit and a large down payment.
6. Be reasonable in your offer price. Your Realtor is your best guide here since every property and every situation is different. Many bank-owned properties these days are already priced well, so by offering well below the list price almost guarantees you either get a counteroffer or get rejected outright.

Of course, always consult your Realtor in regards to all these issues (and others) since no one answer works for everyone.

Many buyers go in to an offer situation thinking they can ask for the world and offer a low price thinking the seller will come back with a counteroffer.  While this is sometimes true, when there are multiple offers, a buyer may get only one chance to get that home they love.

So... consider going in with your highest and best offer from the start. If you lose out, at least you know you gave it your best shot.
 

November 2009: This Month in Real Estate