Multiple Offers

I just got off the phone with a disappointed buyer, who thought he had bought a property, and just learned that a higher offer came along before it was signed, and he lost out.  These situations vary, in that some sellers continue to work with the first offer, some let everyone rebid, and some set a firm deadline to decide and sign. What is the same is that there is always at least one unhappy person, who didn't get a property.  In this case, it had been less than 24 hours, but sometimes it can go on for several days or even more.  

There are ways to prevent disappointment.  First of all, don't hesitate.  If you see a great property, make an offer quickly.  Try to make the offer as clean as possible--assume that, in this market, there may be other contenders.  Don't put in contingencies that you can live without having.  Match the seller's dates where you can.  We see so often that people insist on things, and then don't get the property, after which they say that they would have given in.  

I always tell people to make the offer that they would be unhappy to hear that someone else got the property by making.  If you are going to say later that you would have gone higher, then do it upfront.  If you have other access to cash, to make a better offer, don't wait to pull that out.  Go all in.  When listings are in short supply, and they are in Connecticut, that's called a seller's market.  If you are the buyer, that means that you are not driving the bus.  Accept that and act accordingly.  You can even consider writing a letter about why you would be the perfect buyer, and how much you love the home.  It has been known to do the trick on occasion, and it can't hurt.

Don't offer what you can't afford, because you are wasting everyone's time, including your own, but be realistic.  Your parents, or other sources of advice, probably bought their first homes when interest rates were very high, and they may not be accurate on the cost of money now.  Be sure to get preapproved, so that you can react quickly if necessary.  If there is a counteroffer, be prepared to answer almost immediately.  You need to know your top price, just the way you would if you were bidding for art at an auction.

And, if you still don't get the property after following the advice above, don't waste time on regrets.  You did your best, and it is what it is.  Move on, and find the home of your dreams next time.

Be Prepared to Jump

One of the toughest things for us to combat over the past few years has been the sense that buyers have had, that they can take all the time they want to, while making decisions.  It seemed to many that, not only would the same property be available, but that others that might be as good or better would come along all the time.  That made it difficult to put transactions together.

Now we seem to be joining the rest of the country in having low inventory.  In many price ranges, there simply isn't enough available to satisfy the demand.  This is particularly true at the first-time homebuyer price points.  In some places around the country, time on the market is measured in hours, or perhaps in days.  We're not used to that here, to say the least.

Buyers need to get ready to make decisions on homes that they see, before others make offers, or at the same time.  It helps to have a list of things that must be true about a new home you would buy, in order of how important each item is.  It's also really useful to rank each home as you see it, and, while remembering that nothing is perfect, to eliminate any that do not bump off any of your current top three choices.

Sometimes, it can be crucial to have someone on hand to evaluate changes or additions that you would require, and get a price right away.  Arranging inspections quickly can also give you an advantage, as well of course as a prequalification.  The most important factor, however, is your own willingness to pull the trigger.  More people regret not making an offer in time, than they do those that they make.

This is the point at which I come back to one of my favorite pieces of advice:  Bid the amount that you would be unhappy to hear that it sold for, to someone else.  That's your true estimate of the property's value to you.  And be prepared to come to that number in relatively short order.  That's becoming more important every day in our current market.