ASK THE EXPERT: Expert advice on home-buying negotiations

Guest Editorial by Vienna Laurendi

The Question: ‘What can I do to win in a multiple offer situation?’

Many homebuyers today are wondering, “The market has been so competitive. Can you provide some tips for putting my best foot forward on the negotiating table?”

The Short Answer

Whether or not you are in a multiple offer situation, you always want to have the following basics under your belt. First and foremost, you must have your financing solidly in place if you want to be taken seriously by any seller. That means having the ability to show your liquid funds (cash that is readily available) or a firm pre-approval from a local lender that spells out all of the specifics of the loan you are approved for, including but not limited to the maximum loan amount, percent of downpayment that is required, and confirmation that the lender has pulled your credit and verified income and debts.

Next, you want to have your professional team in place, which includes your mortgage representative, an attorney that handles real estate closings, and a Realtor. Those basics alone have you in great shape when presenting an offer on a property. However, if the seller’s representative notifies you that there’s competition, you want to be prepared to consider including one or more of the following into your offer:

(1) Include a large escrow deposit, 10% or higher if you can. The more money you can put down the more committed you will appear.

(2) Remove your suitable housing contingency. If you have a house to sell, ask your lender to offer a product that allows you to carry both properties until your purchase is in place.

(3) Ask what the seller’s motivations are. A lot of times, the seller or their representative will be very clear on the terms they are hoping for. Sometimes they are most attracted to cash, no inspections and quick closings. However, some sellers need extra time to close and don’t necessarily have any aversion to inspections or financing types.

(4) Offer to relieve the seller of some or maybe all of their closing costs, like updating their legal documents and contributing to broker compensation.

(5) Include an escalation clause. Escalation clauses are an outstanding tool for both buyers and sellers in a multiple offer situation, so long as their representatives understand the clause’s function. An escalation clause allows the seller to counter your offer higher than another competing bid, or to simply counter you at your ceiling without consideration for the competing offers.

And lastly, (6) conduct a pre-offer inspection so that this contingency does not weigh your offer down. (Note that paying for a pre-offer inspection does not guarantee that you will win the bid)

It's important for me to add that “love letters” are not allowed to be exchanged, as they potentially violate Fair Housing Laws, so please don’t ask your representative to include one. Instead, use any one or a combination of the tips above.

It’s All In Your Perspective

A positive attitude will always prevail, but in these moments, it can be tough to remain positive. Reassure yourself that, with the tips above, you are putting your best foot forward – and trust that the perfect house will fall into your lap at the right time.

Try not to be too stingy. Paying a few thousand more in a sale price today will likely not concern you at all a year from now, so go for it if you really love the house!

The Silver Lining

I am experiencing more and more real estate professionals who are willing to come to the negotiating table and actually have a conversation on behalf of their client, which is so refreshing! It’s not always about which buyer offers the highest price or has the most cash. All the terms in an offer come into play, and for each seller the terms can vary as to which offer feels right for them.

One Last Thought

A National Association of REALTORS report noted that, on average, there were nearly five offers per home sold in one recent survey. In the Buffalo market in 2024, we saw a significant share of cash deals closing, with 36% of homes purchased with cash!

Vienna Laurendi (Submitted)

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Vienna Laurendi is a New York State Associate Real Estate Broker affiliated with Howard Hanna WNY Inc.’s Laurendi Home Selling Team on Grand Island, and is an executive director for the Buffalo Niagara Association of REALTORS. You can email your real estate questions to her at Vienna@Laurendi.com or call/text her at 716-4-Vienna (716-484-3662). This article is an opinion piece and was not written with the support of A.I.