This has got to be one of the most competitive markets we’ve ever seen. I’m actually amazed when I see a home that doesn’t have two offers within the first fourteen days of being on the market. If the home is priced right and shows well they should expect multiple offers coming their way. I’m going to share with you three easy steps to making sure you win on the house you want in a multiple offer situation.
The first step is earnest money. This is your skin the game! Want to make your offer look really great? Increase your earnest money. Don’t increase it by a couple thousand. Increase it to the amount of cash as closing. If the earnest money is five thousand dollars and the cash at close is twenty-five thousand dollars then write the earnest money check for twenty-five dollars. Why?
The seller has three offers on the table and all of them are near identical in purchase price with no seller concessions and no contingencies. Your earnest money is equivalent to cash at close and theirs is only the minimum who do you think the seller will pick for an offer? You just said, “I don’t have to wait 30 days to come up with the cash, I got it now, and let me prove it by giving it to you up front”.
The second step is specific performance. This box is never checked in the contract. Specific Performance allows the seller to go after the buyer, if they default on the contract, for their earnest money and any damages the seller may have incurred because of the buyer defaulting. It says to the seller, “I got nothing to hide, I want the house, and I’ll let you take me to court if I don’t buy it”. Woah. Let’s talk about this.
First understand that Colorado is a buyer friendly state. The laws are built in favor of buyers not sellers. With specific performance checked you still get all your outs! HOA docs, Inspection, Appraisal, and Loan Conditions are the big outs for buyers. You can terminate on any one of those outs and still get back your earnest money. You chose terminate after your loan condition deadline you’ll be in default and then they can come after you for your earnest money and any damages. This requires legal fees paid for by the seller and time. Not to mention how do you actually prove damages? A contract having specific performance checked makes you look real good in comparison to any other offer.
Last remove all contingencies. Our offer is contingent upon the sale of this home, contingent upon finding lending, contingent upon, this that and the other thing. Remove them. Make it clean. But Marc I have a home to sell where will I live? Find an apartment for a month and rent. Here’s the deal gang. If you sell your home you’ll leave the closing table with what? Cash. What wins in every single offer scenario? Cash. Cash is king. Cash rules all. If you have a home to sell then sell your home first, take the cash, and go find the home you want in the next thirty days as a casher buyer.
With a market as crazy as this there’s not a lot you can do to beat out the competition. If you increase your earnest money to match your closing costs, add specific performance, and remove all contingencies you’ll be the best offer on the table every time no questions asked.
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