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What to Expect in Fort Hood
Multiple offers are not as common in the Fort Hood area as they are in other, hotter markets. There is no data on which deals sold multiple offers, but I would guess 5% of single family homes sell with multiple offers. They are increasingly common as the market trends upwards.
The exception is buying a foreclosure. Good foreclosures come on the market at bargain prices and frequently earn multiple offers within the first three days, often selling over the asking price. If you are considering a foreclosure, be prepared to move quickly when a new one comes on the market.
The Seller’s Options
A seller does not have to ask for highest and best. In fact, they do not even have to disclose to other buyers that they have multiple offers. It’s their home – they can do whatever they want, including accepting or counter an offer outright.
Usually, however, they will ask each buyer to submit highest and best, making sure everyone knows there are multiple offers, and giving a deadline for when those are due, giving everyone a chance to modify their offers.
Another misperception is that the seller can sell their home “auction style” when they get multiple offers. A seller can counter a single offer, but they cannot start throwing out prices to everyone to see who can beat it, inching up and up. In Texas, you need an auctioneer’s license to do that.
Highest and Best
A multiple offer situation is sort of a compliment. Somebody else likes the home you are interested in. You have good taste! That is probably the only good thing about multiple offers for the buyer.
Usually, the seller’s agent will invite all the buyers’ agents to submit a “highest and best” offer. Your highest and best offer is your one chance to change your offer to the best terms you are willing to offer.
You will not know what the other offers are – that is confidential. You are in the dark choosing between two roads – offer too little and lose out on the home. Offer too much and you pay more than you had to. My advice? Don’t overthink it and just determine what the home is worth to you. Offer that. If you get it, great. If not, you did what you could and can move on.
Tips to Improve Your Offer
This is a good time to review your agent’s CMA on the property to help determine what the house is worth. Did you offer under the value? Is it worth it to you to offer a little more than what it is worth?
Get the Seller to Like You
Try not to insult the seller in any way. Buying and selling is an emotional process, and having the seller like you is actually a major advantage.
Sellers love cash offers. Quick close, fewer closing costs, no lender. Love ‘em.
Just because you are paying cash doesn’t mean the seller is going to pick yours over an offer with financing that is $20,000 more than yours. Generally, by paying cash, you are probably saving the seller about 3% in closing costs in the Fort Hood area. So a $194,000 cash offer is approximately the same as a $200,000 offer with financing.
Get your offer in promptly, as well as your highest and best. Sellers don’t have to wait, and can be fickle. I’ve seen them get a good offer they were happy with and just signed the dotted line without waiting for others.
Make the “Other Stuff” Look Good
Move up the closing date, offer more earnest money (you get it back at closing anyway), use the seller’s title company – in short, make the little things that shouldn’t cost you much as seller-friendly as practical.
Get Rid of Contingencies
Is the seller going to have to wait for you to sell your current house? Sellers don’t like waiting.
I always recommend keeping the financing and inspection contingency (i.e. option period), but you can perhaps shorten the length from two weeks to one week, for example.
Have a Lender with a Good Reputation
If the seller knows they can close the deal, that’s a plus. The seller probably hasn’t worked with your lender, but their listing agent might very well have. Two identical offers, one with a highly esteemed lender with a reputation for being proactive, versus an unknown lender can make the difference.
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