A. One of the most important pieces of information you will need to know when making an offer is whether there are competing bids from other interested buyers. Your Realtor will reach out to the Listing Broker’s Agent to ask if there are other offers expected to be received or if there is an offer deadline. The best-case scenario, for you as a buyer, is that you are the only interested party in that home. That way, you may have a more likely chance of getting offer terms favorable to you accepted. Such terms could include a reduced purchase price or seller provide closing cost assistance.
In situations where there is more than one interested party, also known as competitive bids, the seller has the upper ground! Your Realtor will not know the terms of the other offer and you will not only be competing against those other interested buyers, but also against yourself. My advice in these situations is to make the best offer you can make knowing that if you are not selected then you know you did the best you can.
NOTE: I would not recommend making offers in competitive bids if the home you are interested in is at the top of your price range. In these situations, the purchase price will go higher than the listed sales price.
In competitive bid situations the winning buyers often:
- Offer above the seller’s asking price
- Offer a quicker or longer settlement timeframe based on seller needs
- Offer a rent back if the seller needs to settle quickly but needs or wants to stay in the home after settlement
- Waive inspections (be careful with this one)
- Offer appraisal gap waivers if the price of the home goes significantly above what both Realtors believe the home would appraise for.
When deciding how favorable to make your offer to the seller you need to be aware of your risk tolerances. This is a big decision and you do not want to have buyer’s remorse. Don’t let the emotion of wanting the home take over the logical part of the process.