REAL ESTATE WATCH
by AL REX, CPA & Realtor
Multiple offers are not always a trend that we see in San Diego County. But they do tend to occur more often when there is a lower inventory of homes for sale and higher buyer demand, especially if the home is desirable and priced competitively. Even though the inventory of homes on the market has increased since February, it is still a “hot market” for sellers.
If you’re selling your home and receive multiple offers (more than one offer at the same time), this puts you in a very good position to get the maximum value that the market is willing to bear. Why? Because, in most cases, your realtor will inform each party that a multiple offer situation exists and ask them to each submit their “highest and best offer” by a given deadline. Since each buyer does not know the contents of the other offers, usually one or two of the offers will come in strong and stand out above the rest.
The seller and realtor then review all offers. Consideration is given to all aspects of the offers including the purchase price, terms (all cash or financed), amount of down payment, type of loan (conventional, FHA, VA), financial strength of the buyer, whether the buyer plans to occupy the property or use it as a rental, whether the offer is contingent on the sale of an existing home, etc. The seller then selects what he/she feels is the best overall offer. It is possible that one of the offers not selected may be placed in a “back-up” position, which is advantageous to the seller, in the event the first buyer can’t perform.
Now what if you’re on the buyer’s side of multiple offers? How do you compete without overpaying? Well, this is radically different from the seller’s side, and I have a multi-step process that I coach my buyer clients through if we find ourselves on the other end of multiple offers. In fact, these steps and tips could encompass another entire article, so if you are thinking about buying a home, contact me directly, and I’ll talk you through the varied scenarios.