Multiple offer situations have returned to many segments of the Silicon Valley real estate market, particularly for houses. We are hearing about them all over due to the incredibly low inventory. (Check out the San Jose real estate market analysis for the latest, custom stats.)
What Silicon Valley home sellers need to know and do to attract multiple offer situations
If you’re a Silicon Valley home seller, what do you need to know to try to get multiple bids on your home? What should you beware of? In short, here’s what needs to happen if you want to attract throngs of home buyers on your home for sale:
- The home must be turnkey, either fully remodeled or close to it – it must look like there’s nothing or very little for a buyer to do. In addition to being turnkey, it must be squeaky clean and well staged! It needs to be comfortable – not too hot, not too cold. You want buyers and their agent to linger longer.
- The price must be at or even under market value. That is, you must be willing to price it aggressively. Think it’s worth $1,050,000? You might list it at $999,999 to get in under a major price threshold and to be the very best, most attractive property for the money. Yes, it might be under priced. Over priced listings get either one offer at best or, more likely, none at all.
- The property must be highly accessible. If it is hard to see, you probably won’t get multiple offers (and may get none at all). (Please see articles on accessibility and on open houses.)
- Finally, the property must be well marketed. This includes a wide range of factors ranging from photographs, text, fliers, signs, and even the commission rate offered to the buyer’s side.
What Silicon Valley home buyers need to know and do to compete in multiple offer situations
If you’re a Silicon Valley home buyer, how do you win out in multiples without giving away all of your rights or overpaying for your house/home?
Over the last few years, I’ve written a number of articles about multiple offers and tips for buyers when competing (concepts to beware of, issues around contingencies, financing and more). This is a bit like a multi-chapter ebook on how to work with multiple offers. I hope it’s helpful!
By way of quick summary: you must cover a few areas very, very well:
- You must be pre-approved by a reputable lender (fully pre-approved, or better, fully pre-underwritten)
- You must have a strong down payment (20% or more)
- You must be willing to put 3% down for your initial deposit (also called a good faith deposit and have it wired to title the next business day after the offer is accepted)
- You must have a good agent helping you – he or she must do a good job completing the paperwork (it needs to be thorough and without any major mistakes), must communicate well with the listing agent and represent you and himself/herself as a great team with which the listing agent and sellers will want to work
- You must have a superior price. Your Realtor should “run the comps” for you, or may even prepare a competitive or comparative market analysis on the home you wish to purchase. Pay attention to where the value lies – sometimes that has little to do with the list price! Understand that when there are a lot of bids on a home, the ultimate sale price will not be “reasonable”, it will be high and it may not appraise if too high.
- Your offer terms will also need to be superior.
- Read all of the articles below – they are here to help you!
Tips for Writing a Competitive Offer Part One
Writing an Offer in a Multiples Situation? Financing Tips Part 2
Writing Strong Offers: More Financing Tips Part 3
Tips for Home Buyers Competing Against Multiple Offers – More Financing Tips Part 4
Competing Against Multiple Offers: Contingencies and Timeframes Part 5
Real Estate Purchase Offer Terms to Consider When Competing in Multiple Offers Part 6
Sometimes the List Price Isn’t the Expected Sales Price, So Run Comps!
The Advantages of Presenting and Receiving Offers In Person
On a related note, give yourself some breathing room by seeing the property early on, not at the last open house before the offer due date. It’s not wise to rush through disclosures and comps if all of it can be done early on with more time to absorb the info and analyse the info without so much pressure.
Other resources:
Viewing an open house (on our popehandy.com site)
Deciding what to look for in a Silicon Valley home (also on popehandy.com)
Interested in working with agents who are highly experienced with multiple offer situations? Call or email us today!
