With home inventories getting tighter, more buyers are entering into bidding wars as they compete for the few available properties on the market. A recent study by Redfin reveals that 51 percent of almost 800 real estate agents surveyed reported that multiple offers were the greatest challenge faced by home buyers in the second quarter of this year.
The result is that some buyers are making multiple offers on properties at the same time, in order to boost their hopes of an offer being accepted.
However, some real estate pros say this isn’t such a smart idea.
"I recommend that clients in this situation take a step back and consider what's most important to them in their next home and how far they're willing to go to get it," said James Gulden, a real estate professional with Redfin in Boston. "That way, they can be in the right mindset to make an offer they feel good about on a home they truly love when it hits the market."
In addition, real estate pros say urge sellers to remember that the highest offer is not necessarily always the best offer. Sellers need to be sure that a bidder is really committed to buying their home, and should try to ascertain this when considering potential offers.
Almost forty percent of real estate agents surveyed by Redfin said the main reason why deals fell through this year was due to disappointing home inspection results. Another 25 percent said bids had fallen through after the buyer changed their minds about purchasing the property, suggesting that perhaps they had made multiple bids on properties.
"It's not necessarily true that the inspection reveals major issues or that the buyers just got cold feet," explained Jeremy Paul, a Redfin real estate professional in San Diego. "It's more likely that the buyers who are making multiple offers at prices they may not be able to afford just to get an offer accepted often use the inspection as a chance to negotiate significant credits in order to reduce costs. When the seller won't budge, the buyers move on."