I have been involved in multiple offers in my last 4 out of 5 offers over the last month. I am fortunate enough to have won 3 out of my last 4 multiple offers. Many people would think it’s just the price that matters but that would be a fallacy.
Here are some tips that I have found success in my own personal experience when writing a multiple offer. I will include examples but leave out specific addresses out of respect of my clients.
1. The December 23rd, 2015 listing and offer presentation.
Yes, two days before Christmas, a gorgeous (and undervalue) building lot in the British Properties magically appeared in my inbox. I was not expecting to see such an opportunity arrive to market at that time. That said, I was in my office and on the phone right away…. Yes, I sometimes feel I don’t have a personal life.
After a quick walk on the property, 3 hours later, our offer was presented. $2,130,000 was the offer and the asking price was around $2,000,000. However, we had subjects because my client’s financial manager was in Hawaii, the Bahamas, or wherever you are supposed to be at that time of year. Sadly, we ended up in second position but I convinced my client to write the backup offer.
I had a hunch that we weren’t the only ones with a financial manager on holiday. December 27th roles around and I get a call from the agent. “We are getting so many calls on the property and I think the first offer is struggling with finances”. The first offer subjects have to be off by January 2nd or so. I inform my client and we start our subject removal process. We remove all our subjects except for the backup offer clause because I was anticipating an extension request from the first offer.
Alas, I was correct with my instincts. The first offer requested an extension, which was promptly refused and we bought the property just like that. I could easily flip this property for $2,400,000 right now…. 3 weeks later!
The moral of this story is to ALWAYS write a backup offer if the first offer has conditions.
2. The Duplex in Surrey
I always prefer to present multiple offers in person and in front of the seller. I try and form a connection with the sellers by talking about how wonderful my buyers are for their property. In this case, the sellers had two cribs in one of their bedrooms and the place was absolutely immaculate. The pride of ownership was very refreshing.
So the presentation involved me framing my presentation around a story that involved the buyers falling in love with the home because of the cribs. They wanted a space for their future grand children and the home was already child proofed. It was the perfect fit! I sat and presented the offer for 30 minutes and formed a connection with the Sellers.
There were 7 offers presented in total. This strategy worked so well that our second place, no subject, offer was chosen because the Sellers wanted to pass on their legacy to a loving family. I even introduced the Sellers to my Buyers… and yes… we all hugged it out.
3. Wild Wild West of Multiple Offers
Just the other day, I received a call from a client at 7pm. “We want to write an offer on a house and offer presentation was changed to tonight at 9pm”. I normally don’t send clients to open houses on their own but this was a weird situation where I had a photo shoot for a new listing and the public open house was on a Wednesday from 5pm to 7pm with offer presentations changed from Thursday to that evening!
So I had to do two things. One, do the worlds fastest Comparative Market Analysis (CMA) and perform a very intense due diligence report. Normally, I like to walk the property with a client, sit down, and discuss our strategy ahead of time. In this case, the client was looking for advice without me even having a chance to gather my thoughts and there was definitely no time to drive out to Surrey to see the property! I really don’t like to be in this position but my client insisted in presenting the offer.
So, the listing was priced at $750,000. My research showed me that no homes in the area have sold for under $829,000 in the last 3 months. I knew there were at least 10 offers being presented and I also knew that very few buyers would be the investor type that you see in West Vancouver. I had to put my Surrey real estate thinking hat on and assume that most competing offers were end users and most likely would have some sort of subject since there was no time for due diligence. My client was an architect and was comfortable purchasing the house as it needed some renovation work.
So this is how the top 4 offers unfolded:
1. $860,000 with subjects to financing, inspection, etc.
2. $840,000 with subjects to inspection
3. $800,100 with no subjects with a 10% deposit in hand.
4. $795,000 with no subjects
Which offer would you have taken?
Well the seller took my offer – $800,100 with no subjects.
Here are 8 tips for winning at multiple offers:
1: Always have your financing in place prior to writing (unless your financier is on holiday).
2: If you need a building inspection, do it at the open house.
3: Always present in person whenever possible. Try and present to the Sellers.
4: Always have a strong deposit if possible and your deposit in hand. 10% is great
5: Talk to the listing agent and form your closing dates around the Seller’s needs.
6: Don’t ever be afraid to write a backup offer because you never know.
7: Always ask the Listing agent how many offers there are before submitting your own. This could change your offering price depending on the competition.
8: Lastly, and this is my favorite tip, eavesdrop on other agents and their conversations with there clients. Sometimes people talk to much and you can overhear their offering price.
As always, any feedback and comments are always appreciated!