Wednesday, August 22, 2012

Multiple Offer? What's a Good Offer?

We're fast approaching our high season, when real estate activity in the Sarasota area traditionally increases from the summer months.

The increasing buyer demand for property, combined with shrinking inventory, means many buyers will likely be faced with a multiple offer situation, especially on aggressively-priced short sales and foreclosures.

When this occurs, the owner's agent (private owner or a bank) will advise me as your buyer representative to present your highest and best offer.  Some banks, such as Bank of America, will require that you sign an acknowledgement that multiple offers have been received, and give you a deadline date for making your best offer.

But what's a good offer when competing with other interested buyers?

A good offer (highest and best) in the eyes of a bank or a property owner consists of these items:
  1. Highest offer price:  Think of the list price as a guide and try to dismiss your initial reaction to paying at or above list price.  In my opinion, your highest and best offer price is the price you would kick yourself for not making, if your offer is not selected.
  2. Largest escrow deposit:  Low escrow signals a flighty buyer not fully committed to make the purchase.  The escrow deposit is applied to your purchase, so why not offer a substantial escrow deposit to make your offer stand out?
  3. Quickest closing date:  This benefits the seller of the property two ways.  They know they have a motivated buyer who wants the property, and it gets the property off their hands and off their books.  A quick closing with a cash offer really helps you stand above competing offers.  You can close a cash purchase on a foreclosure in as little as 2 weeks, but I recommend 3 weeks minimum.
  4. Cash: Cash is king.  A cash offer is almost always considered a better offer than one that requires financing.
  5. Complete offer package with all required addenda and proof of funds.
I look forward to helping you navigate the Sarasota area's active and competitive real estate market.

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