Posted By Alan Donald @ May 31st 2011 4:39pm In: Buyers


Multiple OffersYou and your REALTOR® have spent many hours “weeding out” potential homes for sale and finally find the home of your dreams: It is priced right, perfect size, location, features, etc. and you don’t want to miss out on this opportunity, so you go see it as soon as it is listed… and then, while you are walking through, two other parties arrive to view it. So you have competition (no surprise, since well-priced homes are still selling well!). It is pretty obvious that, even if you write an offer immediately, the listing agent will call your agent to say that there will be multiple offers. How can you improve your odds that YOUR offer is the one accepted? What can you do to make your offer more attractive to the Seller?

Look at this situation from the Sellers’ perspective and try to find out more about their motivation. What are their concerns? What is their timing like? Have they purchased another home? What is their motivation to sell?

Sellers generally are concerned with two basic issues:

a) They want to net more money; and
b) They want to pick the offer that is more likely to close on time, so they can move on with their life.

How can you make your offer more attractive without over-paying for the home?


Your REALTOR will give you the neighborhood comps that will guide your offer. You obviously have to determine the MAXIMUM amount you are willing to pay (i.e. the amount at which you are OK walking away from the home). Then allow for the “winning margin” (see below).

TIP #1: Make your offer on the “odd number”. Avoid making your offer on the multiples of $5K. Instead of offering $230,000 (your maximum price), offer $231,500 (max. price plus winning margin). Why? Many people and agents are used to making offers on the multiples of $5K, and the “winning margin” may set your offer apart. Plus, the winning margin does not really make any significant difference to you in terms of monthly payment.

TIP #2: Include an “Escalation Clause”. If you want to beat the competition but you don’t want to pay more than what you have to, you can include an “escalation clause” stating “purchase price shall be the greater of $X (your INITIAL offer, see Tip #1), or $Y (the escalation amount) above any other verifiable written offer, up to a MAXIMUM of $Z (your maximum price - plus the winning margin)”. In the above example, if the list price was $220,000, you could offer “the greater of $221,500 or $500 above any other verifiable written offer, up to a maximum price of $231,500”. Note: many institutional lenders like HUD and Fannie Mae will not accept escalation clauses.


Tip #3: An all-cash offer almost always trumps an offer that requires financing. If you have the cash but would like to have some cash left for a “rainy day”, you can purchase the home and then do a cash-out re-finance.

Tip #4: Include a full pre-approval letter. From a local lender, including the address of the property – this will trump an offer with no pre-approval, a "generic" pre-approval or a pre-qualification letter.

Tip #5: Offer a Higher Earnest Money amount. The higher the earnest money amount, the more serious the offer will be presumed to be.  If the earnest money is well protected with the contingencies, this should not make any difference to you.


Tip #6: The fewer contingencies, the better! Normally buyers would make offers contingent upon inspections, financing and appraisal. If you can and feel comfortable making a non-contingency offer, this would appear very attractive to the Sellers. If you are paying cash, consider not including an appraisal contingency. If you want to remove the inspection contingency, consider doing your home, termite and structural inspections before making your offer! Yes, you may lose the bidding war and therefore money you paid for your inspections. But an offer with no inspection contingency is a stronger offer to the Sellers!

Tip #7 Sell Before You Buy! Some buyers start the search for a new home before they even place their current home on the market. Realize that in this “Buyer’s” market, very few Sellers would consider a contract contingent upon the sale of another home. Asking a Seller to essentially take their home “off the market” to wait until you sell your home is unreasonable in today’s marketplace.

Tip #8 Be Quick! Sellers prefer an offer that will remove the contingencies and close quicker. Give yourself enough time to do your due diligence, but get on with it! And let the Seller know that you mean business by tightening all the deadlines.


Ideally, you will find the home you love and can make an offer without having to compete with other buyers. But multiple offers are becoming more common as Sellers price their properties well and are motivated to sell. By following these tips, you may make your offer the preferred one!

The Alan Donald Real Estate Team provides professional Buyer and Seller representation. Please email us at if you have any questions or would like to arrange a FREE CONSULTATION.



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