Money Matters

How to Win in Multiple Offers

By Dennis Adelpour

The Los Angeles real estate market is one of the most competitive markets in the world!  LA is an area with tremendous money making opportunities with great weather, restaurants, entertainment and culture.  Those are just some of the reasons why a lot of people want to live here.  The shortage of housing inventory and a high demand for homes has caused the market to skyrocket.  In many areas of Los Angeles, buyers should expect to get into a bidding war for properties that are correctly priced and marketed.  

To give you an idea, over 50% of our buyers in the recent months have had to go up against at least one other offer, once their perfect property was identified.   Multiple offers are real and they aren’t going away anytime soon.  The good news is, in every case the last 3 months, our buyers were the ones that WON in the bidding war.  Even when one of the properties had over 10 offers.  In addition, 2 of our buyers won in a multiple offer situations and they WERE NOT the highest price and they were NOT all cash.  Winning in a multiple offer situation does not happen by accident.  It’s done through a proven and methodical process that maximizes our client's chances.  

The agent you work with has a direct impact on the outcome of every real estate transaction.  Below are a few of the factors that help our clients win in multiple offer situations.

Personality and Attitude

This is probably the most important, yet underrated aspect of winning in a multiple offer situation.  It’s a fact that people want to work with people they like and trust.  Buyers should consider writing a personal letter that will connect with the seller.  An agent's relationship with the listing agent also goes a long way.  We have great relationships with all the agents in Los Angeles so when they see a buyer working with The Adelpour Group, they know we will close so listing agents always encourage the seller to give priority to our offers.     

What does the seller want

A lot of agents are quick to write high priced offers with short closing periods thinking that is what the seller is looking for.  Unless your agent has had an in depth conversation with the listing agent regarding the needs of the seller, this strategy may backfire.  Most sellers we are working with will need some sort of rent back, or a long escrow because they either have not found their replacement property yet or need the funds from this sale to purchase their next home.  Don’t just write an offer, “guns blazing”.  Find out what the seller wants and try to accommodate the best you can.  Many times, you can offer less on price if your terms work for the seller.  

Cash is King - How to win when you need a loan

Cash offers are more desirable than financed offers.  With an all cash offer, transactions typically close faster and have no loan contingency.  In todays market, one major reason deals don’t come together is because the loan doesn’t get approved.  You don’t find out the loan is unapproved until many days into the escrow.  You can imagine a seller's frustration, being in escrow with a buyer for 30 days and then having to cancel due to the loan not being approved.     For those reasons, coming in with an all cash offer will set your offer apart from the rest as the seller will be more at ease.  If you do need a loan, we can help you make it look like a cash offer with very similar terms.  We work with lenders who can approve you for a loan BEFORE even going into escrow.  If that is the case, you can write an offer with a loan, but have NO loan contingency as your loan would be approved well before hand.  As a listing agent, I would be much more comfortable with an offer with the loan contingency removed.  It is a bit more complicated and the process needs to be executed correctly, but when done with the right team of professionals, this strategy can give you get the edge you need to win in a multiple offer situation.  

Conclusion