The Truth About Multiple Offers in the Twin Cities

The Truth About Multiple Offers in the Twin Cities

If you are trying to buy a home right now, there is a good chance you have either been involved in a bidding war or you are worried about ending up in one.

The good news is this.

You do not have to win every bidding war.
The goal isn’t to win every bidding war. The goal is to win the right house.

That may sound simple, but it is one of the most important lessons buyers need to understand.

After more than 23 years in real estate throughout Lakeville, Bloomington, the South Metro and across the Twin Cities, I can tell you that losing a house does not mean you failed.

In many cases, it simply means another buyer was a better fit for that particular seller.

How Common Are Multiple Offers Right Now?

Despite what some people believe, not every home is receiving multiple offers.

From what I am seeing in the field, roughly 40% of homes are selling above list price and receiving multiple offers.

Some homes receive:
• Two offers
• Three offers
• Five offers
• Six offers

And occasionally a truly exceptional property might attract ten or more offers.

But here’s what many buyers misunderstand.

Multiple offers are usually driven by condition, not price range.

The homes attracting the most attention are not necessarily the cheapest homes.

They are the homes that show beautifully.

What Buyers Are Really Competing For

The strongest demand right now is for homes that are truly move in ready.

These homes are:
• Clean
• Decluttered
• Updated
• Well maintained
• Professionally presented

The front door is clean.

The paint is fresh.

The trim looks cared for.

The home feels ready for the next owner.

What I have noticed since COVID is that many buyers place a much higher value on convenience than they did in the past.

They do not want projects.

They do not want repairs.

They do not want to spend weekends renovating.

Many buyers would rather pay a premium for a home they can enjoy immediately.

That is one of the biggest reasons certain homes continue to create multiple offer situations.

The Biggest Myth About Bidding Wars

Many buyers believe the highest offer always wins.

That simply is not true.

In reality, sellers are often asking themselves a different question.

“Which buyer is most likely to get me to the closing table?”

That means sellers are evaluating things like:
• Down payment amount
• Financing type
• Earnest money
• Appraisal gap coverage
• Lender reputation
• Closing timeline
• Overall strength of the purchase agreement

The strongest offer and the highest offer are not always the same thing.
How Sellers Often View Financing

As a general rule, many sellers tend to view financing in the following order:

• Cash
• Conventional financing with 20% or more down
• Conventional financing with less than 20% down
• FHA financing
• VA financing

This does not mean FHA or VA buyers cannot win.

They absolutely can.

But many sellers perceive government-backed financing as carrying additional requirements and potential hurdles.

Whether that perception is fair or not, it often influences decision making.

Some conventional buyers with larger down payments may also qualify for appraisal waivers through their lender, which can further reduce uncertainty for the seller.

Again, every situation is different.

But understanding how sellers think can help buyers position themselves more effectively.

What Sellers Are Really Afraid Of

Most sellers are not worried about getting an extra few hundred dollars.

What they are worried about is the transaction falling apart.

Their biggest concerns are usually:
• Financing issues
• Appraisal problems
• Inspection disputes

This is where buyers sometimes make mistakes.

An inspection should be used to identify major concerns.

Things like:
• Foundation issues
• Roof leaks
• Electrical problems
• Significant safety concerns
• Radon issues

What sellers fear is receiving a long repair list full of small cosmetic items after accepting an offer.

Sellers are often selling certainty as much as they are selling a house.

The less uncertainty they feel, the stronger your offer becomes.

Common Buyer Mistakes

Some of the biggest mistakes I see buyers make include:

• Writing too early and thinking being first guarantees success
• Waiting too long on a great property
• Falling in love with one specific home
• Not being fully prepared financially
• Listening to friends and family instead of real estate professionals and lenders

Well meaning advice from people who are not actively buying and selling homes every day can sometimes create more confusion than clarity.

A Real World Example

I recently worked with buyers who were fully qualified, had excellent credit and could comfortably afford the home they wanted.

We submitted a strong offer.

We were even led to believe we were in a great position.

At the last minute another buyer submitted a similar offer.

The difference?

The competing buyer was putting significantly more money down.

The sellers believed that offer carried less risk and chose it instead.

That experience can be frustrating.

But it illustrates an important reality.

Sellers are choosing the offer they believe has the highest probability of closing on time without issues.
The Buyers Who Succeed Understand This One Thing

Buying a home is not a sprint.

It is a marathon.

You may write:
• One offer
• Three offers
• Five offers

Before finding the right home.

That is normal.

It is part of the process.

And in many cases, buyers later discover that the homes they lost were not actually the best fit for them.

What felt like disappointment at the time often turns into gratitude later.

The Goal Isn’t to Win Every Bidding War
The Goal Is to Win the Right House.

The buyers who ultimately succeed are not always the buyers with the most money.

They are the buyers who:
• Stay patient
• Stay prepared
• Trust the process
• Work with experienced professionals
• Keep moving forward when they lose a house

Eventually the right opportunity appears.

And when it does, you need to be ready.

Thinking About Buying a Home in the Twin Cities?

If you are tired of losing out in multiple offers or wondering how to make your next offer stronger, I would be happy to help.

Every situation is different.

Every seller thinks differently.

And every offer should be built around a strategy.

You do not need to win every bidding war. You just need to win the right house.
Call or Text Tom Sommers Directly at 952-994-7204
Lakeville • Bloomington • South Metro • Twin Cities Real Estate