Posted on: 3 January 2017
Losing a home you wanted to another bidder can be a heartbreaking experience. Some buyers have turned to making multiple offers on different houses to avoid that heartbreak. Whether or not this is the best strategy for buying a home is debatable. If you are thinking of making multiple offers, here is what you need to know.
Should You Make Multiple Offers?
Ultimately, the decision to make multiple offers is yours, but you should consider the pros and cons before deciding. One of the most obvious drawbacks to making multiple offers is that you could receive multiple acceptances. If your purchase contract did not include the right contingency, you could end up in court facing the possibility of losing your earnest money for the homes.
In some cities, there are laws that prevent buyers from making multiple offers. If you do, you could be faced with legal consequences for breaking fair dealing laws.
There is a major upside to making multiple offers though. If your offer falls through on one home, you still have the other homes to fall back on. Your chances of getting a home you really want are significantly increased.
Can You Protect Yourself When Making Multiple Offers?
If making multiple offers is legal in your city and you are willing to take the risk, there are some steps you need to take to protect yourself before making any offers. One of the most important steps you can take is to make sure your purchase contracts has contingencies in place that allow you to back out of the offer without penalty.
You should also consider having an earnest money deposit for each home on which you are making an offer. Some people choose to make photocopies of the original and include the copies with each offer. However, your city's laws might invalidate your offer. By having the money available for each home, you can avoid missing out on the home you want.
Once your offer is accepted on a home, let the other sellers know immediately. The longer you put off this task, the more difficult it will be to get your earnest money back. It also shows consideration for the other sellers. Instead of pulling their homes from the market because they believe they have a solid offer from you, they can continue to market their home.
Your real estate agent can help you assess your situation and the city's laws to help determine if using the multiple offer strategy is right for you.Share