Happy Friday! Weekends are the busiest time in real estate. Before the weekend starts, it’s important to educate you on if it’s a good idea to put multiple contracts on different homes.
Is it a good idea? or Is it too risky?
Many buyers these days are often making offers at prices that they just can’t afford. This is a technique that many real estate agents use in order to lock down a home, with every intention of negotiating the price down. While this can at times work it can also backfire. The reason being is because if the seller doesn’t budge to lower the price of the home, then the buyer is forced to move on to another home because they cannot afford the original asking price.
So, back to the question. Is this even a good idea and what risks are involved?
It depends on who you ask.
I wanted to discuss with you first on why it could not be a good idea, and potentially put buyers at risk.
Buyers who making multiple offers on homes usually aren’t fully committed to purchasing both homes. We need to be as smart as possible because this is the biggest transaction of ones life and could put them at major risk. Depending on the terms of the contract, if two or more offers are accepted backing out of the other one may not be easy. Risk! Risk! Risk!
Another potential risk is if your lender gets a call from another listing agent for a pre approval. This will raise a major red flag for your lender and might cause them not to work with you. It’s not always the case, but important to note.
I would recommend that putting multiple offers on homes can be a good idea, depending on the market. In a frothy market that’s competitive, agents and buyers NEED to strategize together when putting multiple offers on homes.
Here are some things that both sellers and buyers should should take into consideration:
1. Personal preference on the home while also understanding the guidelines and deadlines carefully with ALL offers!
2. Communicating with your lender about each and every step so that they can best guide you financially.
3. Sellers and their agents should carefully vet offers to consider factors other than price.
These are important reminders because if one offer falls through, the buyer can move onto another offer quickly!
Have a wonderful weekend.