The Seattle and Eastside real estate markets have been a seller’s market for years now and 2022 is continuing this trend. In 2021 we saw record low inventory across the Puget Sound region and a 17.4% median price increase compared to the prior year. To help our clients be in the best homebuying position possible, my company has analyzed the data on thousands of offers that our agents have written. This is a high level review so feel free to contact me to discuss any specific bidding scenarios or buying questions you may have. The goal of the analysis was to see how the various strategies affected our buyers’ odds of winning a bidding war:
Findings and Offer Approach
The biggest finding might not be a surprise: all cash offers were by far the biggest determining factor when creating a competitive offer. With everything else equal, offering with all cash nearly doubles a buyer’s chance of getting an offer accepted when facing a multiple offer situation. In fact, for the luxury market, (which my company defined as the top 10 percent of the market by list price), an all-cash offer increases a buyer’s odds of success more than fourfold.
Cash is king and gives buyers a leg up in the negotiation because it ensures a faster and lower risk transaction for the seller. Without the involvement of a loan, underwriting or appraisal, a seller can expect a quick close and rest easy knowing the buyer’s proof-of-funds were presented in their offer.
Multiple offers are here to stay as inventory levels continue to decline. 2021 proved to have the lowest inventory levels in years – at just over 2 weeks of inventory last summer. A balanced market is 4-6 months of inventory which means the Seattle and Eastside areas have been a seller’s market for many years now. Even investors are competing with regular homebuyers due to the lack of new construction and the disappearance of short sales and foreclosures. In response to this, real estate agents like myself have honed our multi-offer strategies to give our clients the edge they need to win a bidding war. Many times I find it is not just about the offer amount, and it is my job as an agent to figure out what that edge really is on a per-transaction basis.
Winning at a multiple offer presentation begins with understanding how buyers can put their best foot forward. There are many ways to make an offer look attractive and not all sellers care only about the price; many of them care about time and convenience. I also keep it simple and begin with communication. I consider myself, the listing agent, and lender a team and make sure all lines of communication are open long before an offer is presented. Through communication I gain as much knowledge as possible to have an assessment of the underlying motivations for a sale and custom tailor an offer with my buyer to meet the seller’s needs.
Key Considerations for an Offer
Below is a list of other considerations that come into play for multi-offer scenarios. I’m not expanding beyond the list here because my advice on each point may vary depending on the listing my client is bidding on. For example, an offer I prepare for a home that has been sitting on the market for 21 days will look very different than an offer for a “hot home” I’m trying to take off the market before the offer review date. Here is the list of core considerations:
- Escalation clauses
- Down payment/earnest money
- Buyer letters/love letters
- Misc. considerations such as appliances and cleaning
- Rent-backs/delayed possession