More home buyers are finding they’re losing their power position in the real estate market and that when they submit an offer for a home, they may not be alone in the bidding. In fact, buyers who submit low offers may not even get a courtesy of a callback nowadays.
I have personally had clients make full price offers on Mercer Island with an escalation clause up to $50,000 over asking price and be beaten out by multiple offers higher than that!
A drop in the inventory of for-sale homes around the country is prompting more competition among home buyers. Inventory in June is 24 percent below year-ago levels.
"We are seeing more and more multiple Offers," Matt Jensen, a real estate broker in The Issaquah Highlands for The Cascade Team in Washington State, reported.
Money Magazine recently offered potential buyers the following tips if they want to get the winning bid on a home:
- Get pre-approved, not prequalified: Pre-approval for a loan based on a buyer's credit, income, and assets is viewed as better than getting pre-qualified, which is just an estimate of how much that buyer may be able to borrow.
- Find an experienced Agent: Money Magazine advised home buyers to find a real estate professional who knows how to handle multiple-offer situations and can advise how much to offer and help buyers determine if they’re getting a home at a fair price.
- Watch the contingencies: “The best offer isn't always the one with the best price," says George Miller, a Sarasota, Fla., real estate agent. Buyers who put in too many contingencies with their offer may lose out.