Making Competitive Offers

[Jordan Grimstad]

I'm fairly familiar with typical strategies that make offers more competitive, aside from increasing the offer amount (increased earnest money, decreased inspection time, fewer contingencies, etc.). 

However, in competitive markets, it seems evident that most offers will offer standard/healthy earnest money, normal-to-fast closing times, 1-2 contingencies (inspection + financing), etc. as table stakes, and the deciding factor seems to be the top-line value of the offer. That is to say, I'm skeptical that adjusting any of these factors would help push, say, a $200k offer over the top of a $210k offer, even if the $210k offer has "standard" offer terms and the $200k offer has shorter inspection times and a few extra percentage points of earnest money.

Couple of questions:

• Is this pessimistic of me? Do small tweaks in these terms really close a gap? 
• Is there any way to consistently win in a multi-offer situation other than making the highest bid (and, thereby, accepting a leaner CoCR than every other bidder)?
• What if you're bidding against non-investors (i.e. folks who are willing to pay more to have a nice house, and don't care about investment characteristics)?
• Is it a bad thing if you're consistently getting offers accepted? Based on some of my reading it seems like getting an offer accepted should be a rare occurrence.

[Kenneth Reimer]

@Jordan Grimstad Jordan, I believe that answers to these questions would be generalizations. If the seller is primarily motivated by price, then a $200K offer over a $210K offer is unrealistic. That being said, many sellers are motivated by a more probable close; they aren't interested in wasting time in and out of contract. 

The difference that small tweaks makes is dependent on the specific deal in which offers have been made. In very competitive deals where multiple offers are sent, they have a best and final, and the price and terms of the offer are similar, those tweaks can absolutely be what gets your offer accepted. 

If you are consistently getting offers accepted, you're probably closer to retail pricing. I would take a hard look at your underwriting. You want your offer to be the least amount of price and terms that you're willing to offer, but enough for the seller to say yes.

If you want your offer to be accepted more often, offer the listing agent to represent you. You'll now have the gatekeeper to the seller aligned with your goals. This doesn't always work, but getting the listing agent and the seller to the same side of the table as you is crucial.

Feel free to shoot over any more questions, I'd be happy to help!

Kenny Reimer