Spreading Your Home Offers Around
Buyers have plenty of competition for homes these days. Even in areas where home sales are leveling off somewhat, things are still challenging for buyers. It's very frustrating to spend hours searching for a home and then have your offers come to nothing. Some buyers have taken to making offers on more than one home at a time. To find out more about this way of snagging a home, read below.
Is Making Several Offers Against the Rules?
Though real estate laws vary from state to state, buyers are usually free to bid on as many homes as they like. However, many real estate agents warn against it. Using this approach to buying a home inevitably leaves sellers with offers that can be worthless. If a buyer places offers on three homes in the same general time period, what happens when one of the offers is accepted? The other two sellers, unless they have backup offers, are left with an offer that is bound to be rescinded. The practice of making several offers on several homes can also cause buyers problems as well.
Deposits Are Lost
Offers are traditionally secured with a deposit or earnest money. If the offer falls through, the buyer is refunded their earnest money. In some cases, the deal falls through for various reasons and the buyer is refunded. For example, if they don't get financing or the seller fails to make agreed-upon repairs. However, backing out of a contract is not a covered contingency.
That means buyers have a lot to lose if they make multiple offers on homes and more than one offer is accepted. They can lose their earnest money deposits. Deposits vary but are often between 1 and 3%. If a home's offer price is $500,000, the earnest money deposit might be anywhere from $5,000 to $15,000.
Unfortunately, there is more for buyers to know about making several offers at the same time. An offer is a contract to buy a home and once the seller agrees, it's binding. That means the seller can take the buyer to court for breach of contract. This seldom occurs, but it is a possibility, especially if the seller knows that the buyer purposefully bid on their home without being serious about following through.
Rather than going to this length to get your offer accepted, speak with a real estate agent to find homes for sale. An agent can help you make an offer that is more likely to be accepted without resorting to multiple offers.
