Real Estate Purchase Contract - Multiple Offers

Competing with Other Home Buyers in Multiple Offer Situations

A seldom discussed phenomenon often occurs when home buyers decide to write a purchase offer, and this is how it goes:
  • You have been house hunting for weeks.
  • You notice one home has been for sale almost six months without any offers.
  • You figure the home is over-priced
  • You figure you can purchase it for a great price since the seller may be desperate for an offer.
  • You submit a purchase (your agent delivers it to the seller’s agent)
  • The next morning your agent calls to say the house has been sold to somebody else.

How did that happen?

What typically happens – is the minute you want to buy a home, so do three other people. It's extremely common for the seller of a dated and neglected listing to suddenly receive two, three or more offers, all within a brief period of each other.

TIP: When you find a home that you would like to buy, write your offer immediately. Ask your agent to call the seller's agent to find out if there have been recent showings and whether they have received any offers or if someone else may be considering writing an offer. 

Multiple Offers in Seller's Markets

Sometime home buyers wonder if it's even worth trying to compete against other buyers in a seller's market. When there is very little inventory on the market, it's not unusual for a seller to receive 20 offers. It's almost always a good idea to write an offer anyway.

Here are some tips to make your purchase offer stand out from the rest:

  • Submit a Large Earnest Money Deposit (EMD)

    Submit a Large Earnest Money Deposit (EMD)

    Pending home sales sometimes don’t close. Many sellers are concerned that once they commit to an offer, the buyer whose offer was accepted might back out of the transaction or default on the contract.


    The EMD is part of your down payment. By increasing it above normal limits, you are showing the seller you are serious about closing. You're only offering the seller more money a little sooner than later, but it speaks volumes.

  • Show the Sellers You Are Qualified

    Show the Sellers You Are Qualified

    Almost every purchase offer will be accompanied by a lender letter. To stand out, ask your lender for a loan pre-approval letter, which is different than a pre-qualification letter. Being preapproved makes you a stronger buyer in the seller's eyes.

  • Give the Sellers Time to Move

    Give the Sellers Time to Move

    Buyer possession is often a sticky point in the negotiation process. It's hard enough to juggle multiple closings if you are selling and buying simultaneously, and even more difficult if the sellers are doing the same. A good gesture is to allow the seller two to three days to move out after closing, without expecting compensation.

  • Shorten or Waive Some Contingencies

    Shorten or Waive Some Contingencies

    By federal law, you have 10 days for inspections due to Lead-based paint, unless you waive that right in writing. Always get a home inspection but shorten the time-period. If your loan is solid, you may want to waive the loan approval contingency. Also, talk to your agent about comparable sales to decide if you want to waive the appraisal contingency.


    Note on waiving the loan contingency: Waiving the Loan Contingency is a very serious decision and should not be made lightly and you need to be certain by confirming with your lender first that your loan can close. If everything is good to go with your loan, but you do something with your credit or something changes you’re your income or employment while your loan is in process; this could certainly jeopardize your loan from closing.

  • Offer to Bridge the Gap Between Appraisal and Sales Price

    Offer to Bridge the Gap Between Appraisal and Sales Price

    If you have a bit of extra cash, and you think the home might not appraise at the price you are offering but you really want the home, you may want to offer to pay the difference between the purchase price and appraised value. However, it is recommended that you and seller execute an Addendum stating the maximum amount of difference that you would be willing to pay for, and that seller to reduce the price accordingly for any amount above your maximum.

  • Write Your Best Offer

    Write Your Best Offer

    In a seller's market, don't hope for negotiation – Offer your highest and best price up-front (the price you can live with if your offer should be rejected). Do your best and make your offer attractive – maybe offer a bit above list price. Ask your agent for a Comparative Market Analysis (CMA) to determine pricing. Sometimes sellers deliberately set the list price below comparable sales to generate multiple offers, so paying a little extra doesn't necessarily mean you are paying over market value.

Multiple Offers in Buyer's Markets​

In buyer’s markets, the winning offer in a multiple offer situation is often less than the list price. The number of multiple offers are generally considerably fewer, meaning you might be competing against one buyer in-lieu-of 20.

Here are suggestions for competing:

  • Sell Your Exiting Home First

    Sell Your Exiting Home First: If you are moving up and have a home to sell, don't buy before selling. If you're a first-time buyer, you may already have the advantage over a buyer who needs to sell before buying. If one offer contains a contingency sale, the seller will gravitate toward the offer without a contingency to sell.

  • Play Nice

    Play Nice: Don't ask the seller to give you personal items. Don't expect the seller to pay your closing costs. Find out which items are customarily paid for by the seller and offer to pay a few such as: title policies, escrow fees, transfer fees, etc. Discuss this with your agent.

  • Find Out What's Important to the Seller

    Find Out What's Important to the Seller: Ask your agent to find out the hot buttons in the transaction. These could be seller requests or listing agent expectations – ask what will seal the deal and give it to them. Maybe it's a fast closing or maybe a longer than usual escrow period, or perhaps the seller just needs a few extra days to move out.

  • Share the Love

    Share the Love: Most sellers have an emotional attachment to their home and want to see it fall into the hands of an acceptable buyer. Be that acceptable buyer. Write the seller a brief letter explaining why you love the home and why you deserve to be chosen as the winning offer. Be sappy but sincere.

  • Prepare for a Counter Offer

    Prepare for a Counter Offer: You can write the best offer and a listing agent is likely to advise the seller to counter all the multiple offers, even in a buyer's market. In California, for example, sellers do not need to make identical counter offers. Each can be different. Also, the seller retains the right to choose or reject accepted multiple counter offers.