With growing numbers of buyers ready and eager to enter the property market and the supply of available property diminishing, multiple-offer scenarios have become commonplace in today’s real estate sector. This is according to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, who says that buyers need to be prepared to go up against other buyers and ensure that their offer stands out in order to get the home that they have their heart set on.
“The millennial generation, who are consumers under the age of 30 years old, are now ready to buy property, however the oversupply of property that we saw during the post-recession years is now a thing of the past and many areas are experiencing stock shortages. As a result, one property could be sought after by several buyers, which will lead to a multiple offer situation,” says Goslett. “In this scenario, a buyer needs to be able to have the negotiation tactics to ensure that the seller takes notice of their offer.”
According to Goslett there are a number of things that buyers can do to swing the seller’s attention in their favour and make their offer more enticing:
- Offer more money: When it comes to negotiation, the buyer shouldn’t just say that they are serious about the deal, they should show it by putting down more money as a deposit or offering more than the other buyers are willing to. That said, buyers should always bear the market related price of the home in mind, and not put in an offer dramatically above that price, or what they can’t afford.
- Research and have knowledge about the area: Buyers need to research the property prices in the area and have a clear understanding of what homes are selling for. This will enable them to know whether they are putting in a fair offer that is market related.
- Verify funds: Sending a pre-approval letter with the offer to purchase will show the seller that the funds are available and that they won’t have to wait for the approval of finances.
- Don’t hold back, go in strong: Buyers should rather put in the best possible offer from the start then try to offer more at a later stage. In a competitive, multiple-offer situation it is always advisable for the buyer to put their best foot forward and make a good impression with the seller.
- Allow the seller room to move: When negotiating occupation dates in the offer to purchase, buyers should be mindful of the seller’s timeframe when it comes to moving. This will show that the buyer is reasonable and that they want to make the transaction as easy as possible for the seller. In a case where the same amount has been offered by two buyers, it is these kinds of secondary elements of the deal that could count heavily as a deciding factor. Understanding the seller and what they want will help the buyer to better negotiate the deal in their favour.
- Be prepared for a counter offer: In a multiple-offer scenario, there is always a good chance that a seller will counter one buyer’s offer based on another offer they have received. The buyer needs to be prepared for this situation and decide whether they are willing to engage in further negotiations and possibly up their offer or walk away from the deal.
“With a short supply of property available, it is likely that multiple-offer situations will be the norm for many would-be property buyers in today’s market. Preparation is key to any negotiation and having the right knowledge will ensure that the buyer can make the best possible offer and be competitive in a multiple-offer market,” Goslett concludes.
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