In today’s market, low housing inventory is a challenge for
many buyers. In some areas, it can result in bidding wars as soon as houses come
onto the market.
Housing inventory has been low for several years, but pent-up
demand appears to have increased. Homes
most likely to receive multiple bids are usually newer homes and homes with updated
kitchens and baths.
What Happens When There Are Multiple Bids?
Not all listing agents handle multiple bids the same way.
Some contact all agents who submitted offers and ask that buyers submit their
highest and best offers, giving them a chance to make their offers more
attractive. Others assume buyers have made their best offers up front and proceed
with presenting offers to the sellers.
In neighborhoods where multiple bids are expected, some listing
agents specify in advance that all offers will be presented to the sellers on a
specific day. This allows reasonable market exposure for sellers and streamlines
bidding, simplifying what can be a chaotic process. It also evens the playing field for buyers.
What Can Buyers Do?
If buyers know that there are multiple offers, they should
make their best offer up front. Price is almost always the most important factor.
Other important aspects of an offer are the inspections and appraisal.
To gain an edge, some buyers have been waiving inspections,
in addition to offering more than asking price. Some are also leaving out the
appraisal contingency, committing to purchase the home even if the appraiser
values it at a price lower than they agreed to pay.
Waiving inspections can be risky, especially for older
homes. Sellers in Pennsylvania are required to disclose any known material
defects, but inspectors may uncover previously unknown problems or even issues
the sellers may have been aware of but left off the seller’s disclosure.
Some buyers accept these risks to get the home they want.
Others choose to wait for another home to come onto the market, hoping for less
competition the next time around. Buyers need to balance the risk of losing a
house with the risk of finding that the house has major problems later on.
Read more of
Annette’s real estate articles
for the latest real estate advice. What real estate topics would you like to
see covered? Send your ideas to annette@preferredhomes.com
If you’re planning to buy or sell a home, contact Annette
Nelson at (610) 247-7892 or annette@preferredhomes.com
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