Newbie - Multiple Offer Situation

[Mike Miller]

I am in the process of making my first offer on an investment property (a duplex).  They are collecting multiple offers to choose from and they need to be in by tonight.  Unfortunately at this time I will need to get a loan, and will request an inspection contingency.  There has been a lot of interest in the property.  It is in good shape, and the owner has replaced windows, A/C units, some appliances, and fixed a roof leak.  Asking price is $260k and rents should be $1150/mo (each).  It isn't a great deal, but it should cashflow and is in a good area.

The seller is an older couple who are starting to have health issues and want to liquidate their REI.

Currently I am planning to offer a small amount over asking price.  Any tips to get help get the offer accepted?

[Kelly Kormos]

Here is what I send to clients. Let me know if you have any questions:

Here is a list of the most common used strategies to win a multiple offer situation. Some buyers will use as many as they can, a few, or only one. We can access what would work for you and implement those with your offer.

1. Offer over list price- this is the most common and is usually done in combination with other strategies. How much over is always the question. I tell people you have to go up to the point that if you win you won’t be made that you actually have to pay that but if you find out you lost by $500 you wouldn’t say “I would have paid that”.

** One way to do this is with an Escalation Clause. If the other agent is ok using one of these (some do not allow them for their offers) then you would write something like this into your offer.
Escalation Clause Buyer to Seller: Buyer to offer $500 (X dollar amount) over the highest offer up to $360,100 (dollar amount) gross sales price. If escalation clause is accepted, then listing agent to provide written evidence of highest offer submitted.

- This can help you win but maybe not go up to your highest offer you would have submitted.

2. Buyer pay their own closing costs

3. Buyer pay their own title insurance

4. Buy Home As-Is pending a home inspection and nothing major is found

5. Personal Letter from buyer to seller- you could write a personal letter to the seller on why you want this home. The more heartfelt the better

6. Increase your Earnest/Trust Money

7. Appraisal Clause- Buyer will pay $X over appraisal amount as long as property appraises for a minimum of list price not to exceed agreed upon contracted purchase price

8. Waive Home Warranty- you can always purchase this yourself so it might be a way to give the sellers a little more net profit and put you ahead of others. Estimated Cost ~$600