As the Scottsdale real estate market has surged in the past several months, we are seeing more and more multiple offer situations. While no buyer is ever happy about being involved in a bidding war, it is becoming common in Scottsdale. Unfortunate for buyers (and fortunate for Sellers) it is often the only way to buy the home you want. It is like the prettiest girl at the dance; the likelihood that you are the only one interested in the prettiest girl is pretty low. The better the home, the more attention it will get. The fear of overpaying often prevents people from offering list price or over list price. This is a very understandable fear. No one wants to be the sucker that overpays. But if you look at the historical chart of Scottsdale prices, the prices of homes are still close to half of what they were in 2006. Do you really think you are a “sucker” if you pay 48% off of previous prices, versus 50% off? Trust me, compared to all the people who bought during 2006, you pretty much look like a genius. Your timing is pretty spectacular if you are in the market for a home during 2012. You should have additional comfort with home prices increasing up to 2% per month.
My advice in multiple offer situations:
1) Make your offer with the fewest contingencies possible. Cash is king, so if you are able to offer cash for the home, with no financing contingency that is preferable.
2) Put down a significant earnest deposit. The earnest deposit should be at a minimum 3-5%, but more is better. It makes the offer appear stronger and doesn’t cost you anything additional.
3) Find out in advance what close of escrow timing the Sellers prefer. Try to match their preferred closing dates. Some sellers of vacant homes want to close asap in 10-15 days, other sellers want time to relocate and prefer 45 days.
4) Submit your offer! If you don’t throw your hat in the ring, there is no way to win.
Carmen Brodeur JD
Trillium Properties, LLC
9825 E Bell Road, Suite 120, Scottsdale AZ 85260