What Every Home Buyer Dreads – Multiple Counter Offers!

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What Every Home Buyer Dreads – Multiple Counter Offers!

Serious about buying a home in today’s tough Orange County Real Estate Market? Well, you are going to have to be prepared for fierce competition in some price ranges – so fierce it may lead you into the land of Multiple Counter Offers.

So here are four tips for victory the land of Multiple Counter Offers:

  1. DON”T PANIC! Stay calm.  It is what it is.  The home seller’s strategy worked and they are now in the driver’s seat.  Oh – all you control freaks sit down and figure this out!!! Don’t let the home of your dreams slip through your fingers because you want to get into a pissing match with the seller. Just my professional advice. Don’t create a movie in your head about what the seller is trying to do.  Deal with the terms of the contract they send back to you – on your terms.
  2. DON”T GET EMOTIONAL! Stay focused on the terms they are coming back with and don’t go all Broadway Drama on it.  At the end of the day, the sellers are people just like you, worried about not leaving anything on the table and wanting to get the best deal from a well qualified buyer – just like you are trying to get the best deal for the best price possible.  Go to the business side of your brain during this part of the negotiation.  Always with “how badly do you want to own this home” as the back ground or foundation of your decision.  Or how badly does your spouse want the home and how badly to you need to make sure they get what they want….. Another blog altogether.
  3. KNOW THE TRUE MARKET VALUE OF THE HOME! Be realisitic about what the home you are going for is really worth and make decisions from that basis.  This does not mean what other similar homes are listed for, it means what homes like the one you are trying to buy HAVE ACTUALLY SOLD FOR – wait for it…. wait for it…  in the last 3 months!!  It doesn’t matter what the seller paid for it.  It doesn’t matter what they owe on it.  It doesn’t matter what it would have sold for in 2006.  All that matters is now.
  4. GIVE THEM BACK YOUR BEST OFFER!! There are other buyers who have made offers – you will have no idea what they have offered, how strong they are, or how the seller has countered them. What are your stregnths as a buyer?  Here are the things that sellers will use to decide which offer to go with.  Take your offer to the top of your financial capability in each of these areas if you really want a shot at winning:
    • Type of financing – Cash is king.  Conventional loan (at least 20% down) is second.  5% down is third3.5% FHA is forth.  And $0 down VA is last.  (a very sad situation for those who have served out county so bravely.)  Where does your financing stack up?
    • Amount of down payment –  The more the better, baby.  If your financing is not the strongest, and you have the cash resources, this may be a strategy to prove to the seller you are serious and willing to prove it up front.  And you will get it back if you have reason to cancel within the contracted time frame (usually 17 days.)
    • Length of escrow –  Shorter is usually stronger.  Longer is weaker, unless the seller has some condition that you can work around.  Your agent should ask about this for you – this may be the area where you can get creative to get the deal!
    • Anything else you asked for – Did you ask for a credit toward closing costs?? Better add it on to your offer price in a Multiple Counter Offer situation.  Did you ask for any of their personal property (washer, dryer, refrigerator, dog…)? Better do the math on that and add it to your offer price – the seller will deduct the price they think these things are worth from your offer to figure out their net – beat them at their own game – use what you know about the market value to add or substract from your offer price accordingly.

So there you have it  – my 2 cents worth on what to do in a Multiple Counter Offer situation on a home for sale in Orange County – or anywhere else in the United States today.  Now go buy a house and make it the home of your dreams!

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