Since 2006 the real estate market has been such that it was uncommon for more than one buyer to fall in love with the same house at the same time. But as I have been mentioning for several months, homes for sale inventory has dropped dramatically from a year ago while the number of buyers in the market has ballooned.
The last 5-6 years has programmed most buyers to believe that they must negotiate the price of the home to ensure they get a “good deal” and that sellers have no other choice than to work with them. Well given the how much tighter supply is today, it is not uncommon to see two or more buyers interested in the same house.
When you are the only offer on the table, the seller has no other choice but to negotiate with you if they want to sell. The moment a 2nd buyer enters into the picture though, now buyers are not negotiating with a seller but rather bidding against another buyer. You’re no longer in a negotiation – you are in an auction… a silent auction at that.
When in a multiple offer situation I always advise my clients to put their best offer forward first since in most cases I have seen, the buyer won’t have a chance to sweeten their offer later. Many buyers are frustrated by this but if you look at it from the seller’s point of view, why would you work with the weaker offer when you can work with the stronger one instead?
As we go in to the spring months we will see even more buyers enter the market and while we will have more homes come up for sale as well, the truly premium properties in an area/price point will have the highest level of interest and thus the most buyer competition. My advice for buyers today is that if you fall in love with a house, make that offer as soon as you can. A day or two (sometimes even hours) can make the difference between being in a negotiation or an auction.
