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How to determine how much to offer in a multiple offer situation

Dear Phyllis,
My husband and I are hoping to buy a home within the next year. We have made a couple of offers which were not accepted. One was a bank foreclosure and there were multiple offers. We made a full price offer but the home sold for much more than what the bank was asking.  
Is there a formula to determine how much higher than asking price we should offer when multiple offers are in play?  
Anita

Dear Anita,
Each situation is unique but there are numerous tactics to use to create an excellent offer. Experienced real estate agents know that at a minimum any seller in a multiple offer situation wants to accept the strongest offer.

You can strengthen your offer by providing evidence of your preapproval and verification of your down payment. Proof of a high FICO score is also an important addition to your offer package. Contingency periods for inspection and loan approval should be quick. If the property is vacant, close of escrow should be within 30 days (or sooner if possible).

When the property is occupied, your real estate agent should contact the seller’s Realtor® to learn the seller’s preference as to closing date. You likely wouldn’t want to lose out on your dream home because the seller desired a 60-day closing and you offered 30.

Your real estate agent should try to find out from the bank’s agent how many offers are in play and how many are over asking price. They should ask if this is the final counter (what is considered highest and best) or if the seller will counter some of the better offers. Although your agent should ask, they may or may not get an answer to each of the questions.

Unfortunately there is no magic formula. Now, you and your Realtor® need to review comparable listings and sales. You need to determine the market value and the value of the home to you. Then make your best and strongest offer.

  Phyllis Harb