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Tuesday, April 14, 2015

Home Buyer Tips: Multiple offers are the number one cause of...

The real estate purchase process can be somewhat mundane.

After all the steps are pretty basic.  Start by obtaining a mortgage pre-approval and selecting your real estate agent.  Then find a suitable property, agree to terms with the seller, perform due diligence (have appropriate inspections/survey/review association documents) and close the deal....simple, right?

But with the current Brevard County, Florida housing market favoring sellers many buyers find themselves in multiple offer situations.  Unfortunately there may be one or two more buyers wanting the same property at the same time.

This is usually the place where a listing agent will tell all agent's involved to have their client customer submit their best offer.   The less than exciting  process mentioned above can very easily become the opposite of mundane - especially if a bidding war ensues.

Buyers now find themselves in the unfortunate position of sitting with a decision hold, walk or raise their offer.    And then there are some unknowns to consider.

For example, does the listing agent have one of the competing buyers as a client? Advantage listing agent.  Does another agent within the listing office have a competing buyer?  Advantage Listing office.

Is the buyer's original offer already the highest on the table?  Could the buyers end up bidding against themselves?

Will the decision going to be made on something other than just the price?   After all, sometimes it is not the price but rather the cleanest offer that a seller selects.  A quicker closing, fewer contingencies, for example, may trump a higher offer price.

If one is obtaining a mortgage then the uncertainty created by multiple offers may extend to the mortgage approval.  After all, the appraisal could very well limit a buyer's ability to compete.   Lenders make loans based on value.  Value is determined by the market.

Regardless, multiple offers are the number one cause of price creep!

Ready to buy a house in Melbourne, Florida?  Call me at 321-693-3850 to begin your search process.

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