The market is seriously hot and experts predict that it will continue to be throughout the year. This makes things particularly challenging for both buyer’s agents and seller’s agents alike.
Buyer’s agents are finding themselves in crazy situations, competing to get offers accepted against a sea of desperate buyers and rising prices, that are eating up an already scarce inventory…. things are wild out there folks, but I’m sure I don’t have to tell you this!
Amid the market madness, I wanted to quickly share a few sure-fire ways I know of, paired with some expert advice I sought out, that will give you a better chance at getting your next offer accepted.
Setting Client Expectations
Today we’re focusing on the things you can do within the offer itself, but keep in mind that all of the tricks in the book won’t matter if your client doesn’t have realistic expectations going in. In a market like this, you may need to do some extra work setting your client’s expectations early on – but we’ve covered that in the past and will keep today focused on the Offer itself.
The Winning Factors
When you know you’re facing serious competition you bring your ‘A-Game’ to the offer table, and the first thing you’re going to want to do is make your offer stand out. If you’ve been in the industry for any amount of time, you may already use some of these tricks for getting your offers noticed now.
What I want to point out here is the tricks that you’ve likely reserved for the most challenging circumstances in the past, are now going to be your new normal strategies if you want to compete, and WIN for your buyers in this existing market.
Clean & Complete
Let’s get the basics out of the way quickly, because even though these things may seem obvious, overlooking the simplest things can jeopardize your offer entirely. I was speaking with a friend and REALTOR® Jairo Rodriguez about this, and he mentioned his top priority is always to “… ensure that we have all documents/addendums, all Inspectors/attorneys/lenders info up front so that when we submit the offer they know we’re ready to get the ball rolling asap.”
Make sure your offer is complete – seems simple and obvious, but in a multi-offer situation, incomplete offers are going to the bottom of the pile. Make sure you are not only ready to submit your best offer as early as possible, double check that you’ve completed every field, included every disclosure, signature and date. Remember, when the competition is high, every detail matters.
Make your offer as clean as possible – The less likely your buyers are to back out of the offer for any reason, the more attractive the offer is going to be. Let’s be honest – the best thing a seller can really imagine is a smooth and definite closing. Many times sellers will consider – and even accept – offers at a lower price point, if they think a closing is more likely to happen with a particular buyer’s terms. The way you communicate to a seller that your buyer is a sure close, is to make sure your offers are free of contingencies (even on inspections), financial constraints, and any seller concessions.
Avoid asking for personal property – Unless it’s been stated in the listing that the sellers are willingly including personal property in the sale, avoid asking for anything. Getting caught up on something like a hot tub could mean your offer gets pushed to the side, even if all other conditions are favorable.
Making your offer stand out is easier if you’re able to create a connection between your buyer and the seller, as well as yourself and the listing agent. Here are a few ways to make the offer process as personal as possible:
Write a letter – The best way to spark up a connection between two parties that are unlikely to meet in person, is to have your buyer write a personal letter to the seller. In order to establish a bond that will affect the sale of a home, it’s important that the letter isn’t just a piece of fan mail for the house though.
Have your clients explain what living in the house, neighborhood, and local community will do for their lives. If they have family close by, connections with people in the area, or ties to local businesses, be sure to mention anything that could resonate on a deeper level with the sellers.
Need to one-up the traditional letter? If your buyer’s are comfortable enough, a video letter can really work well here. People are much more likely to make a connection with anyone’s story – and buyers themselves – if they’re able to see their faces and hear their voices.
If this is something you haven’t done before, maybe do some more research on the topic because you don’t want to make a mistake and say something that could have repercussions later on. There are fair housing, as well as other considerations to take into account. When writing these letters I would make sure you consult with your broker and/or attorney beforehand.
Call with the offer – This is one of the more personal things you can do as the Buyer’s Agent to make your client’s offer memorable. In reaching out to another friend and AIC Member, Nicolette Mascari on the subject of offers in the current market, she brought up how she will “… always call to present an offer – with so many emails and people coming through open houses, I think this helps build rapport with the listing agent and shows you’re a good agent that’s invested in your client.”
I really love the point she makes here about being invested in your clients – it also builds rapport with the other agent during the sales process. Beyond the level of professionalism this adds to the interaction, it creates reciprocity on both sides of the transaction, which can only work in your favor.
Point blank: it all comes down to money. The more of it there is on the table for the sellers, the more likely they’ll be to lean towards your offer. BUT – I’ve seen sellers accept a lower offer because contingencies were waived, or closing terms were more favorable, or even that they preferred working with one of the agents… so understand that while your offer price is certainly key, you can’t bank on it as your only negotiating tool.
Nicolette mentioned she “had 35 offers on my listing!! It took all day to go through them (143 parties over the weekend). I’m exhausted and nervous about how high it’s going and appraisals and all that.”
Offer over asking – Everyone wants a deal, but it’s probably best to level with your clients that this is not the market to be making low offers in. Coming in at anything below asking price will put your client’s offer out of the running. This gets tricky to find a balance between what your clients are able to afford and what the home’s value really is, so make sure you take all those factors into consideration when working with your buyers.
Put your money where your mouth is – Sellers don’t get a thrill from worrying about whether a transaction will close or not, but you know as well as anyone that even the most likely deals can fall through. Some of the ways you can make a show of good faith, and prove to the seller that you have the most serious and invested buyers include: putting down a stronger earnest money deposit (typical is 1-3%), paying in cash to keep banks from interfering, delaying or derailing the deal, or even making a larger down payment to the buyer’s loan program to establish they are in a great financial position.
Add an escalation clause to your offer – Keep this strategy reserved for when you think you’re entering a bidding war, but adding this clause to your offer can absolutely help your buyer’s from getting out-bid. Before you do this, make sure you work out the boundaries of the escalation – again ensuring they are in line with what the buyer’s can afford as well as the value of the home.
Recently, I spoke with my friend Derek Ronning who mentioned he used an escalation clause along with some other tactics to get his buyers’ offer accepted among some crazy competition. He mentioned that “the escalation clause not only delivered the price the seller wanted, it also showed how strong our original offer was.”
Your Reputation Precedes You
Everyone wants to be well-known as the agent around town, but fewer agents realize how important their reputation among other agents is to their overall success – and in this current market, to improving the chances of getting your buyer’s offers accepted.
Jairo Rodriguez brought up a great point, before anything else he tries to “build rapport with the listing agent and find out what is important to the seller – is it fast closing, or delayed closing, no repair requests or inspections, etc. and draft the offer to reflect what the seller’s needs are.”
A key thing to remember is the seller’s agent is wildly busy too, so try to be understanding and empathetic when you get the opportunity to interact with them, which should help build a sense of reciprocity between the two of you.
In addition to making fast friends, being a great real estate agent is the fastest way to another agent’s heart – I’m sure of it. Just think of a time where you transacted with a truly excellent agent, and how you felt about their professionalism and the interactions you had with them. It’s a winning recipe for your buyers either way, so here’s a reminder to step up your ‘Agent A-Game’ if you have any room to do so!
These are all great strategies for multi-offer situations, however keep in mind with a market that is so competitive, even using all of these strategies combined might not end up with your buyer getting the home. You can’t win them all, so don’t get discouraged!
If you lose optimism, it’s very easy for your buyers to sense that. The last thing you want is for any negativity to be affecting the very next offer you’re going to write. Instead, stay positive and have a plan for what’s next. You’ll show your clients that you’re a top notch professional and will set yourself up for success!