Multiple Offers in Menlo Park
The Menlo Park, real estate market, is hot, and attractive home is a sought-after commodity. Triangle area buyers are all itching to get into a new home, and sellers usually expect to receive more than one offer very quickly after a Real Estate Agent posts their listing. Many Menlo Park sellers decide on an offer after only a couple of days on the market.
How can you, as a home buyer, navigate these often stressful situations? Read on for tips on making sure you have the most significant opportunity for success.
What Menlo Park Buyers Need to Know
Keep Things in Perspective
Buying a home can be a very emotional process. And when you mix in the fact you are trying to out-offer other buyers, this can be a recipe for disaster. It's essential not to get caught up in the sense of competition and do something you will sorely regret down the road. Such examples include offering more than you can comfortably afford or forgoing necessary contingencies so that you can land the deal.
"When dealing with a buyer looking at multiple offers, I remind my buyer clients to stay within their means and remember that their home is an investment. Often, the home buying process becomes very emotional, so, commonly, buyers get into a mentality that they can't lose a certain house. This leads to overpaying for a home, paying too much in Due Diligence fee, agreeing to terms you wouldn't otherwise agree to, and taking more risk in general," says Aria Vatankhah, a Realtor® with Milad Real Estate.
Be Prepared Ahead of Time
Before you write an offer, make sure everything on your end is prepared and ready to go. The last thing you want is for a seller to think that you have written an offer haphazardly or that a hopeful buyer is disorganized or ill-prepared.
Ensure that you have a strong Pre-Approval letter from a reputable mortgage lender and understand what timeframes the lender can meet. Sellers often desire to close as soon as possible, meaning 30 days or less from contract acceptance. Your agent should reach out ahead of time to see what terms the sellers prefer and help structure your contract accordingly.
Structuring Your Offer in Menlo Park
There are two primary components of an offer that sellers focus on: a majority of the weight on Net Proceeds and Due Diligence Fees.
Net Proceeds are the monies the sellers will walk away from at the end of the transaction. This not only includes what price a buyer has agreed to pay, but also factors such as closing costs, repairs, and even if the buyer has requested a home warranty. You do not necessarily need to have the highest offer amount to have your offer accepted, but make sure you factor in the net to the seller. If you need the seller to pay for your closing costs, it lowers the sellers' yield, thereby making your offer less desirable.
The Due Diligence Fee is the amount given to the seller to take the house off the market while a buyer performs their due diligence on the home. The higher this amount, the more likely it is that a buyer will not terminate the contract. Sellers do not want the house to go back on the market, so the higher you can make the Due Diligence Fee, the stronger your offer becomes. In today's market, it is not uncommon to see Due Diligence Fees at five or even 10 percent of the offer price.
The bottom line is that buying a home with multiple offers takes lots of patience and time. "Understanding the current market is so critical in helping buyers realize the challenges they are faced with," says Aria. "This can be a wild and crazy process, but it's important to work with a buyer's agent who can guide them appropriately based on their own needs."