Buying a home in this housing market can be tough especially with the lack of available homes for sale. How can you beat out multiple offers? In this video, I give you 5 tips that I use with buyers when writing real estate offers to help their offers stand out in multiple offer situations.
In my last video, where I discussed the housing market 2020 forecast (Real Estate Market Update – June 2020), I mentioned how buyer demand was up 13% year over year and how we are experiencing multiple offer situations on a number of the home buyer offers we are submitting. In this video, I will guide you on how to help you put your best foot forward and get your offer accepted by your local Huntington Beach Realtor, Jeb Smith.
How to win when there are multiple offers
1:37 – Buyer Letter – Write a letter to the seller of the home explaining who you are and what you love about the home. You are trying to get the seller to have an emotional response to your offer.
3:02 – Shorten your contingency time frames or Waive your Contingencies altogether
6:00 – Shorten your escrow time frame
8:21 – Put a larger deposit as your EMD (earnest money deposit)
9:45 – Use an escalation clause to get your offer to be the highest price
What is an escalation clause?
Escalation Clause Definition
An escalation clause is a real estate contract, sometimes called an escalator, that lets a home buyer say “I will pay x price for this home, but if the seller receives another offer that’s higher than mine, I’m willing to increase my offer to y price.”
Example of an Escalation Clause in Real Estate
Let’s say that I put in an offer on a home for a Buyer at $600,000 with an escalation clause that says my buyer is willing to pay $1000 more than the highest offer. That would mean that if another buyer wrote an offer for $610,000 then my offer would now stand at $611,000 in this example. This would allow my buyer to always be the highest offer assuming the other side doesn’t do the same thing. I usually recommend that a Buyer put a cap on their price to read something like “buyer is willing to pay $1000 more than the highest offer up to $615,000”, that way you put a limit on the number you are willing to go up to and not get carried away. I also suggest that you put something in the escalation clause that states the listing agent must provide you with proof of the other offer.
Please let me know your thoughts on these tips to win a multiple offer. I’d also love to hear your predictions for the housing market 2020 forecast and the housing market 2020 california?
What are your thoughts on the huntington beach real estate market? Is there a housing bubble? Do you see a real estate crash coming?
Jeb Smith (Huntington Beach Realtor/orange county real estate)
Coldwell Banker Realty
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