Puyallup and its surrounding areas are a seller’s market right now, which means there are more prospective buyers than there are Puyallup houses for sale. This can pose some challenges for buyers who are on the market for a new home, as the selection is limited. Hot homes can easily get multiple offers or go into a bidding war scenario.
If you find a home that you love, but also see that other buyers have already made offers on it, don’t lose hope. You can still persuade the seller to accept your offer and get the home of your dreams - if you do it the right way. Here are some tips to help you buy Puyallup real estate in a multiple offer situation.
1. Get All the Information
It’s not enough to know that there are multiple offers when competing for Puyallup houses on sale. You need to get as many details as possible, including what is motivating the seller, how many offers there are, and what other homes in the area have sold for. You’ll also need to find whatever information you can learn about the competing offers, such as whether or not they’re cash offers, if the other buyers are pre-approved, and if the other offers are above the asking price.
To get all the information you can, you’ll need to work with an experienced Puyallup real estate agent who has — or can develop — a relationship with the seller or the seller’s agent. They’ll also come with a wealth of local knowledge, such as historical selling prices for the area. Once your agent gets as many details as possible, they’ll be in a better position to advise you during the offer process.
2. Leave Out Contingencies
Common contingencies, such as those based on a buyer’s home inspection or obtaining financing, can be the kiss of death in a multiple offer situation as they increase the risk of the deal falling through. Leaving out contingencies is a good way to make your offer more attractive, but it does open you up to personal risk. Talk with your Puyallup real estate agent about whether or not you should leave contingencies out altogether, and how to minimize your risks when using this bargaining tactic.
3. Get Pre-Approved
In a competitive market, sellers are less likely to consider offers from buyers who are not already pre-approved for mortgages. In a multiple offer scenario, it’s likely that you’ll be competing against other buyers who are already pre-approved or who are making cash offers - It’s vital that you bring your own pre-approval letter to the bargaining table.
To get pre-approved, you’ll need to meet with a mortgage lender and show them proof of assets, income, and employment as well as other documentation like your Social Security number and driver’s license. The lender will also check your credit score. In most cases, a score above 620 is needed to obtain a conventional mortgage with the lowest interest rates.
4. Consider Adding an Escalation Clause
An escalation clause is a surefire way to make sure you stay competitive in a multiple offer scenario while protecting your budget. In an escalation clause, you state that you are willing to increase your offer to match or beat other offers - up to a certain point. If you do want to include escalation clauses when making offers on Puyallup homes on sale, make sure your agent talks with the seller’s agent and ensures that they’ll honor this agreement. You may also want to consult an experienced real estate attorney, who can review the clause and make sure you’re protected.
5. Increase Earnest Money
Putting down a deposit of 1 to 2% of the purchase price of a Puyallup home on sale is already the norm. This deposit, referred to as earnest money, shows the seller that you are a good-faith buyer. If your offer is accepted, your earnest money will go toward your down payment. But, if you back out of the deal for any reason, the seller will keep this money. If you want to compete in a multiple offer scenario, one tip is to increase your earnest money amount. Talk with your Puyallup real estate agent to decide if — and by how much — you should increase your deposit to get a leg up on your competition.
6. Work with an Experienced Puyallup Real Estate Agent
An experienced and well-connected real estate agent is your best friend when it comes to multiple offer scenarios. Your agent can establish a relationship with the seller’s agent to get timely information, be on-call to respond quickly to escalating offers, or be your advocate should the situation escalate to a bidding war. Your Puyallup real estate agent will also act as a valuable advisor during the offer process. They’ll help you decide how much to increase your offer, which clauses or contingencies should be left in or out, and will support you should you need to walk away and start looking at other Puyallup properties.
7. Show the Seller You Are Flexible
Flexibility in closing, move-in dates, and other issues is very important to some sellers - sometimes even more important than the ultimate amount their home sells for. Have your Puyallup real estate agent communicate to the seller’s agent that you are willing to be flexible in all areas to make the deal go through. Flexibility just may be the edge you need to push out other prospective buyers and clinch the deal.
Though a multiple offer scenario in a competitive market can be stressful, it doesn’t have to be overwhelming. If you use the above tips, work with an experienced Puyallup real estate agent, and know when to walk away, you can achieve success when shopping for your new home. Are you ready to move forward and begin scouting Puyallup houses for sale? Reach out to one of the experienced realtors at The Agents Real Estate Group for professional guidance.