Multiple Offers Are Back

Multiple Offers Are Back
	How to survive a bidding war		MAY 2012
	One of the biggest stories of the spring 2012 housing market is the return of multiple offers. It's not the frenzy of 2005, but right-priced homes are seeing heavy action right out of the gate, and many people are surprised to find homes going under contract above list. What should you do if you find yourself in a bidding war? Here are a few tips. Sellers: • The highest offer isn't always the best offer. After enduring years of falling home prices, it's tempting to automatically accept the highest bid. But these days you also need to take a hard look at a buyer's ability to close. Weigh factors such as finance contingencies, earnest money and closing date. In the end, choosing the right buyer is just as important as choosing the right price. • Move quickly. While the market is heating up, it's still incredibly fickle. Respond to offers quickly, and once the terms are to your liking, get a contract signed ASAP. The longer a negotiation drags on, the more tenuous it becomes. • Maintain your objectives. Sure, all things being equal, you'll take the highest price you can get. But if your target price was "X", don't all of a sudden set a new target of "X plus Y". "X plus Y" has a nasty habit of turning into "X minus Y". Stick to your game plan, and be happy when it succeeds. • Foster a feeling of equity in negotiations. A person is likely to walk away from a negotiation when they feel they've lost control. This is important to remember, even in multiple-offer situations. While you may have the leverage, it's important to keep a buyer engaged and avoid ultimatums. Buyers: • Start with your best offer. If you know you're going into a multiple bid scenario, write your best offer from the start. • Earnest money can make a difference. Increase your earnest money deposit to show the seller you are serious about closing and will not back out of the transaction. • Pre-approval is a must. A mortgage pre-approval (or proof of funds for cash buyers) is a necessity. Shopping for a home without pre-approval is an exercise in futility in today's market - multiple offers or not. • Find out what's important to the seller. Ask your broker to find out the seller's hot buttons in the transaction. Maybe they're willing to accept a slightly lower price for a fast closing or an "as-is" contract. • Waive contingencies. Depending on the condition of the home, your finances and/or the state of your local market, it may make sense to waive certain contingencies, such as a home inspection or mortgage financing. We should discuss this strategy at the outset to make sure you are comfortable with it. Preparing for multiple-offer situations ahead of time, can make the process much less stressful and give you the edge you need to succeed. Contact me anytime, and remember I always appreciate your referrals. In the news: Emanuel says O'Hare cargo center will create thousands of jobs Military land at O'Hare Airport acquired by the city in 1996 for private development that never happened will finally get the international cargo center that former Mayor Richard M. Daley envisioned when he made that $104 million investment. More Mortgage rates fall to new lows again Average rates for 30-year and 15-year fixed mortgages fell to fresh lows this week. Cheap mortgage rates have made home-buying and refinancing more affordable than ever for those who can qualify. Mortgage buyer Freddie Mac said Thursday that the average rate on 30-year loans ticked down to 3.83%. More Multiple bids? Housing market showing signs of life Karen Boguslawski was stunned when she started getting competing bids for her home in Chicago's Edgebrook neighborhood, resulting in a 12-day race toward signing a contract with a buyer. "I was completely shocked when I had a scheduled showing within a couple of hours of it going on the market"