A South Burlington couple lists a condo for $275,000. Within days, they field multiple offers: one from a widowed retiree, looking to downsize; another from a young couple with a child on the way, looking to rightsize; and a third from a person recently divorced, looking to move on.
After the dust settles from a quick process — which can literally take one or two days in this current seller’s market — the retiree emerges as the owner of a new South Burlington Condo. He even offered cash and $3,000 above the asking price, which was an attractive deal-maker for the seller, who was eager to unload the unit so that he could move into his new home.
Welcome to the current real estate market, where multiple offers are increasingly common, and the inventory of available homes for sale has become increasingly tighter. Declining inventory, nationwide, has caused U.S. home values to increase.
Closer to home, in northwestern Vermont, our agents see similar trends - and those trends are sparking unprecedented multiple-offer situations for buyers and sellers. Laurie Hill, a loan officer at Spruce Mortgage in Burlington, says it is currently common for three of the six loan officers in her office to field calls from potential borrowers on a Monday morning, all interested in the same “hot property” that was listed over the weekend.
“From a lending perspective, it’s really important to have your ducks in a row. The earlier in the process the better,” says Hill. She advises borrowers to make a pre-qualifying letter for approval a priority. Collect and prepare the necessary paperwork, she says, such as pay stubs and tax returns. A credit check is also necessary, and information about the debt-to-income ratio. Generally, lenders like to keep it below 43% for all debt when prequalifying a borrower. “Of course, the lower the better,” says Hill.
Our talented teams of agents concur: Being pre-approved could mean the difference to a seller who’s facing five options. Here are some other tips from our agents, for buyers facing multiple offers:
- Use a professional to educate you on how multiple offers and counter-offers work. If knowledge is power, then be a powerful buyer.
- Shop first, to know what you want. Our agents can help ensure buyers get to know the market by looking at multiple properties first.
- Some people can carry two properties; some can’t. So if you’re a buyer that could face multiple-offer situations — be sure you can move quickly into your new home or a suitable short-term fit.
You could be up against other potential buyers who can pay cash, and above the asking price. So it’s best to be prepared for how you might handle such a scenario. Again, our agents can assist in this area.
From a seller’s perspective, it is of utmost importance to have your home ready to show at all times. Multiple offers mean multiple showings, and they, too, could be in the form of eleventh-hour requests. So it’s also vital to keep a schedule that allows Showings to be scheduled as easily as possible. Go ahead and schedule your vacation around the same weekend you plan to put your “hot property” on the market – as long as you can be easily reached by your Agent to discuss potential offers.
Also, be prepared to move rapidly. Earlier this year, one of our agents handled the sale of a home that faced 10 offers and was under contract in four days.
Finally, it is certainly to a seller’s advantage to have multiple offers on a home, but is not always easy for a seller to choose the right one. Sometimes, sellers must put an attractively priced offer aside for other factors, such as contingencies; cash or financing; and a closing date.
Our agents are equipped to educate buyers and sellers on the expectations of a multiple-offer situation. The process can be frightening, fast and complicated, so it is best to have a professional on board. Contact any of our agents to have them help you with the nuances and strategies that come with multiple-offers situations — for buyers and sellers. Our agents are here to guide you to the best results in the least amount of time.