Things have changed a lot in one year.
Last year if my buyers found a house they liked they could put in an offer and if the seller turned it down they could resubmit a higher offer or if the seller countered they could re-counter until a price agreeable to everyone was reached.
If the buyer decided the price the seller would accept was too high they could decide not to re-counter and just walk away from the negotiations.There was usually enough time to come to terms with not getting the house at the terms they felt comfortable. They would be disappointed but would understand it was probably a good idea to keep looking.
That situation drastically changed in our area for the first time home buyer market and the up to $250,00 (approx) markets. A full 80% of the offers I have prepared for my buyers this year have been submitted in multiple offer situations. There are a few very very important things to keep in mind when you are in this situation.
1) When your Realtor tells you to put your highest and best offer in do so. Think about how much you do or do not want the house. Think about what you can truly afford and what the property needs. many of these properties go for asking price or above. Some don’t. Its hard to have a crystal ball but your agent can prepare comps to show you what the property is likely worth so you don’t vastly overbid.
2) Consider your terms. A conventional loan (20% down or more) or if possible a cash offer, quick closing, few or no contingencies all make your offer more appealing and it will stand out positively against the rest. That said I really don’t recommend forgoing the home inspection.
3) Be prepared for disapointment. Only one person will have their offer accepted. Especially prepare yourself if you can’t afford near asking and you really like the house. Do what you can to research another possibility. The home buying process can be an extremely emotional process.