While showing several homes in the last few weeks, I was surprised to come upon multiple offer situations, twice. Even though each home was in a nice area and in turn key condition, I am still wary of encouraging a potential buyer/client to offer over asking. Isn't that how we got into this mess?
There are also multiple offer on luxury homes.
In the past when there were multiple offers, some buyers gave up their inspection "contingency". Even though a home is sold "as is", a buyer still has the right to conduct their own inspections and is given a specific period of time to do so. It is never smart to waive this. It also may protect the seller from any chance of punitive actions later.
In the case of these two properties, both on the Peninsula, they were both priced slightly under market value, and in pretty nice condition. They were perfect for a first time home buyer.
The Following will Help You Decide How to Handle Multiple Offers:
- If the home is a "Bank Owned" property, often times, they (The Seller) may require a buyer to be Pre-Approved by their banking institution. You still have the right to use your own mortgage company and existing Pre-approval letter.
- Be sure that if you are procuring a loan, your pre-approval letter is dated less than 60 days from the time you put in an offer.
- Never give up an Inspection Contingecy because of the number of offers.
- If indeed you as a buyer are offering "over asking" be excrutiatingly sure your Realtor conducts a mini CMA (Comparative Market Analysis) This will assure you that you will not be over paying for the home.
- It matters not what you think the home is worth, if you are obtaining a loan, your bank will conduct an Appraisal, if the appraisal comes in less than the selling amount (Your Offer), you will not be approved for the loan.