The Marin County real estate market has favored sellers for the last 10 years. This means that buyers usually face bidding on desirable homes, typically those in good school districts, a walk to town, close to San Francisco, and remodeled/in good condition. In multiple offer situations, these houses may sell between 2 to 10% over the asking price. How to win? An experienced, successful agent will tell you that it’s about far more than calculating the highest price.
The Best Strategies to Get Your Offer Accepted
Madeline bases her advice on three decades of experience in the Marin market:Don’t hesitate! If you love a home, tell the buyer’s agent on day 1. This communicates to the seller that yours will be a solid offer and that you will be there until the home becomes yours. Of course, you may have some considerations or queries, but it’s critical that you not mention these to the selling agent. Instead, share any concerns with your own agent – it’s their job to get the answers.
Buy the property “as is” without any contingencies. This is not advice we would have given several years ago, when it was typical for the buyer to pay for an inspection after a price was agreed upon – with further negotiations to follow if necessary. Over the last five to 10 years, however, competition in Marin has made this process impractical. Now, sellers provide pre-listing inspection reports in their Disclosure Packet. As a result, buyers know about the home’s condition before they make an offer.
A good buyer’s agent will advise you on the quality of the inspection reports and the reputation of the inspector. If there are questions about what’s in the reports or concerns about the inspectors, the buyer may ask the seller for permission to do their own inspection or have a contractor look at the property, at the buyer’s expense. In our experience, sellers usually allow this request and are impressed with your level of interest.
All cash offer. If you can provide cash for the purchase, your offer will be more attractive to sellers. They will have a greater certainty that the sale will proceed to completion. Many sales in Marin are all cash. However, buyers often take a mortgage after closing to free their assets. An experienced mortgage advisor can guide you through this process. A cash offer also lets you remove the last important contingencies: loan and property appraisal.
Note that all-cash offers may not justify a lower offer amount. With up to 40% of offers being all cash, this alone may not give you an advantage in a competitive situation.
If you do not have cash for the purchase, pre-qualification for a mortgage loan is useful. This means that your lender has higher confidence in your financial status and ability to make payments. In some cases, your agent may advise you to remove your contingencies for an appraisal and loan. This makes your offer equivalent to a cash offer, so your agent will carefully consider many variables before making this suggestion.
Close and continuous communication. Your agent’s role is to stay in close and continuous communication with the listing agent to share your sincere interest, get answers to your questions, and understand the seller’s needs and concerns. These considerations can make all the difference as to whether your offer is accepted – even if yours may not be the highest. For example, does the seller want to rent back, need a fast closing or a specific closing date? A good buyer’s agent will craft an offer with these items in mind. As discussed below, the amount you decide to offer also depends on your agent’s close communication with the seller’s agent.
The Offer Process
It’s important to understand how the offer process works:
- The seller’s agent will usually specify a date on which offers are due. In some cases, offers will be accepted as they are submitted. However, we have seen this change midway through the process. When offers are requested by a deadline, you may submit a “pre-emptive offer” before the deadline, but this is not always successful. Your agent can advise you on this.
- When offers are accepted as they come, it is best to submit them as soon as possible.
- Buyers usually put a 24-hour expiration date on their offers, which means the seller must decide quickly.
- The seller can reject all offers, accept one offer, or make a counteroffer to one or more of the prospective buyers.
Your Offer Price
Determining the price is an art, not a science, and many factors come into play:
Your offer will depend on the price being asked and how much you’re willing or able to go over that price.
Comps, short for comparable sales, are a way to gauge how much a property is worth by comparing it to the final sale prices of similar properties. Comps are merely the starting point. Because all buyers are looking at the same information, your agent’s expertise and advice are paramount. For example, while comps will show the percentage of choice properties that sold for over asking price, this information is useful only if the house was priced correctly – a good buyer’s agent will know whether the house was underpriced or fairly priced for the market conditions at the time.
The offer amount will depend on how many other offers may be submitted. An experienced buyer’s agent will stay in close touch with the listing agent to find out how many offers are expected. The number can change, sometimes at the last minute, and it’s prudent to wait until near the specified submission time before making your offer.
Lower offers on an attractive property are usually unsuccessful. However, we have seen them work in unusual circumstances where sellers favor a buyer for personal reasons.
An experienced buyer’s agent may have an intuition when it comes to the offer, considering the price asked and the number of offers expected. For example, a $2 million asking price and six offers might suggest raising the offer by $50,000 per offer, to $2,350,000, slightly more than a predictable, even number.
Offering a significant amount more than what everyone else may offer is a good strategy. If your offer is the highest and the others are close, the seller may ask for counteroffers, and you risk losing the house in the second round of bidding. If you have room to maneuver, your agent may seek authorization to let the seller know that you have flexibility in your offer; for example, in price or length of closing period, and that you would like to receive a counter offer.