If you want to win the bid in a multiple offer situation for a Silicon Valley, consider these five things.
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If you want to buy a Silicon Valley home but you find yourself in a multiple offer situation, there are a few select things you can do to ensure you win the home you want. Consider these five things:
1. Know the competition: Your agent should try to find out how many bids you’re competing against and how many disclosures packages have been downloaded. About a quarter to a third of the number of disclosure packages downloaded, will indicate how many offers you can expect to face.
2. Know the market: What’s the average list-to-sales price ratio in the neighborhood for the two or three most recent home sales? If homes there are selling for tens of thousands of dollars over asking price, you want to be prepared to offer that much over list price. This might make you concerned about overpaying, but in a market where values have appreciated by 10% a year, you’ll easily recoup that extra 2% you’re offering in a few months.
3. Consider removing as many contingencies as possible when writing your offer: If you’re working with a lender, get a full loan approval so you can make an offer with no loan contingencies. If you have a property contingency, you have a couple options. If the seller has provided inspections, review them first. If not, ask the seller’s agent if you can do your inspections before making an offer. That way when the time comes to make an offer, you won’t need an appraisal contingency or a loan contingency.
4. Get personal: Write a personal letter to the seller telling them why you love their house and how excited your family is to live there. You’d be amazed at how effective this is. We’ve seen scenarios where a letter was the tipping point that caused our buyers to win the bid despite not even being the highest dollar bid.
5. If you don’t win the bid, get a written backup offer in place: Offer prices can escalate quickly in these situations, and sometimes that No. 1 buyer backs out of the deal. A written backup offer will put you first in line if that happens.
This all works if you have a great agent working on your behalf. If you’d like to talk more about buying a home in our market or you’re thinking of selling your house, give me a call or send me an email soon. I’d love to speak with you!