The good news is the snow's almost gone, baseball season's begun and it's FINALLY starting to feel like spring... and with that comes the (crazy) spring real estate market. In some areas inventory is growing - but there's so much pent up demand after a slow, snowy winter that high demand is still driving the market. Prices are a little all over the place, and buyers are getting savvy - and hopefully in the not-so-far future prices will begin to steady a bit. But for now, the best priced homes that everyone wants very often end up receiving multiple offers. 

So what does a buyer do when faced with a newly listed home, a jam-packed open house and an offer deadline? I'm often asked questions like: What do you think this house is worth? What do you think it will go for? How do I know if I'm going too high? Will I have a chance to go to my best and final? 

WHAT SHOULD WE OFFER?

I wish I had a crystal ball and would sell quite a lot of houses if I did, but unfortunately the best I can do is advise and prepare my clients. Being a buyer in this market can be tough - in a sense you are bidding blindly - there's simply no way to know the motivations of competing buyers, what they might be offering, or how many offers the seller will receive. So ultimately the price you offer has to come down to what the home is worth to you. It's a fine line between offering high, getting a home and wondering if you could have paid less; and offering low, losing out on a home and wishing you'd gone higher.

When helping advise on your offer, my answers will be different for each client - different factors come into play - how long you plan to stay, whether you plan to rent in the future, or maybe this is your forever home. What would owning this home do for you, and how much do you want it? Often I'll send some recent home sales (comps) - but in a budding spring market they rarely match up to or justify selling prices. So we'll discuss some ranges, possible outcomes, different offer strategies and other factors that may help make your offer stand out. 

As for best and final, in this market there's also never a guarantee that a seller will ask buyers to submit a second round of offers for a best and final. In a multiple offer situation, generally I advise clients go in at their best and final on the first try (if they LOVE and want to own the home). Sure, if a seller receives multiple offers that are very similar, they very well may come back; but if they receive one offer that just blows all the others out of the water, there's a good chance they will accept. One might say, "Well if I go to my best, then I won't have any wiggle room to go higher on a best & final"... but again, you decide that final price and if you can't go higher, you don't and keep your offer as is. And if you don't win, you wouldn't have either way.  

Once you decide the magic number, we'll try to structure your offer to make it as strong as possible - including terms, contingencies, dates that are desirable to the seller, and perhaps a personal note to the seller. Because it isn't always about the price, but more often the "total package" - best price and best terms.

...and a lot of finger & toe crossing!

For more info on what to do in multiple offer situations:

Escalation Clauses

Ways to Win a Bidding War

Love Letters & What to Write

*Buyers note: It's true many buyers have to put in a few offers before "finding the one", but don't be discouraged. While multiple offer situations are common, they are not always the rule. Different areas and markets, different price points, list prices etc all vary.