If you’re trying to buy a home here in Nashville, how do you compete against multiple offers on the same home?
The home’s listing agent will usually tell you that there are multiple offers and ask everyone for the best and final offer. You’ll have no idea what the other buyers have offered.
The first thing I recommend is to keep your offer clean with as few contingencies as possible. For example, don’t ask the seller to cover closing costs if you’re able to cover them. Don’t ask for a home warranty either, as you can always pay for one of your own. You could also refrain from asking the seller to pay title fees, which can cost up to $2,500 depending on the price of the home.
Obviously the purchase price is a big deal too, so you want to go in with the strongest price you can.
Secondly, I recommend putting down as much money on your home loan as possible. Putting down 5% instead of 3.5% or 20% instead of 10% makes your offer stronger, especially if you’re competing against any cash offers. You can also put down more trust money, which would go toward closing in the end anyway. This shows the seller that you have a lot of buying power.
You could also use an escalation clause, which is becoming so popular in the Nashville market that I’d say about half the offers in multiple offer situations have them. It’s a stipulation in an offer that says you’re willing to pay a certain amount more (say a $500 increment) than the next highest offer up to a certain amount. That way you don’t have to bid all the way up to the absolute highest amount you’re willing to pay right away, but $500 over the next highest bidder, up to a maximum point.
Finally, you can write a personal letter to the seller about how much you love the house and how you and your family would use it. You can really pull at their heartstrings with a personal letter.
If you have any other questions about winning a home in a multiple offer situation, you can always give me a call or send me an email. I’m here to help.