The phrase "multiple offers" is often understood to mean that a home is so popular that several different buyers have made offers. Home sellers usually love having this situation because it shows a high level of interest in their home. There is, however, another situation where the phrase multiple offers applies. Read on to find out more.
Making Multiple Offers
If you are searching for a home and real estate market conditions are brisk, you might actually consider making an offer on more than one property at a time. Put yourself in a buyer's shoes. You diligently search for a home and make offer after offer—only to find that anther buyer won the home. To help raise the odds of winning the race, some buyers place multiple offers on various homes hoping that at least one of them will gain acceptance. For buyers who are in a hurry, this method of finding a home may be effective. Buyers should be prepared, however, to suffer the consequences if they end up getting too much of what they wished for.
Problems With Multiple Offers
From the seller's point of view, buyers that make multiple offers are annoying, but it's not illegal. When a buyer fails to follow through on an offer, the house stays on the market or goes to the next buyer in line. There are more ramifications for buyers that place several offers on different homes, however. Offers always have to backed up with a financial deposit known as earnest money. That means that every offer a buyer makes has to be backed up with a deposit that is based on the purchase price of the home. Earnest money can be anywhere from a few hundred dollars to thousands of dollars.
Getting an Earnest Money Refund
In some situations, earnest money can be returned to buyers. Having made the mistake of placing offers on several homes at once is not one of those reasons, however. In fact, even if you just change your mind and want to back out of the deal, you are not likely to get your earnest money back. As you can imagine, buyers who play this game should be ready to lose money if more than one seller accepts their offer.
Dealing with a home search in a hot market has its challenges, but there are other ways to cope with this issue. Speak to a real estate agent and get some tips that can help you get the single family home you want without having to lose your earnest money.
