Is this housing market driving you crazy? Multiple offer situations are tough. You need every advantage to win for your clients.
Here are seven strategies to reduce your stress, serve your clients, and come out on top!
1. Education is key! Your clients are overwhelmed by the current seller’s market. Help them understand that inventory shortages, historically low mortgage rates, and high demand create intense bidding wars. If you set the right expectations, your clients won’t be blindsided as a multiple offer scenario plays out.
2. Have financials in order. Do a full budget review with your buyers so they know precisely how much they can afford to offer as earnest money, option (or due diligence) fees and what their mortgage payments would be. Next, refer your clients to your preferred lender for pre-approval before starting the home search.
3. Don’t be emotional. Doing the above-described homework upfront should help your buyers avoid getting emotionally tied to a house they can’t afford. Save your bidding strategies to use on a home they can afford and win.
4. Make wise offers. If you are in a seller’s market, a low offer may insult the seller and make further negotiations tough. Submit the highest and best offer your buyer can afford. You might also recommend offering above the asking price in exchange for something else in your buyer’s favor, such as leaving an appliance.
While your buyer may ultimately have to offer more money for the house, other negotiating points that could increase the chances of an offer acceptance include:
- No contingencies or a limited financing contingency period, if necessary.
- More option (due diligence) and/or earnest money
- Decrease the option (due diligence) period
- Make up the difference between the appraisal and offer price
- Recommend a conventional loan over an FHA product
- Buyer pays for the title search or other closing costs (depending on your state)
- Offer a courtesy leaseback to the seller
- Home warranty waiver
5. Keep the lines of communication open. The relationship between the buyer’s agent, the loan officer, and the listing agent on the other side of the transaction is the most influential factor in determining who wins the property. Consider calling the listing agent to ask:
- What is important to the seller? Is it the closing date or selling “as is”?
- Does the seller need a leaseback?
- Is there a deadline for offers?
- Will the listing agent provide the deadline to all buyer agents?
- Does the seller have a preferred closing date?
6. Be cooperative, not combative.
- Avoid giving ultimatums in contracts like, “Seller to accept the offer by 5:00 pm.” Instead, write, “Buyer would appreciate a response to their offer by 5:00 pm.”
- Don’t be condescending or try to tell others how to do their job. Remember, don’t brag about how great an agent you are. It’s not about you! It’s about your client.
- If the property has issues, think twice about submitting an offer unless the buyer is willing to accept the property “as is” or lose the option and inspection money.
- The seller must know you use a trusted, preferred lender that you will work hard to close on time.
7. Pitch your buyers as the new owners. Let the sellers know that your client loves their home — how they’d like to see your kids grow up there. Some buyers will go so far as writing the sellers a personal letter to share their heartfelt stories. This can motivate the seller to work with you to close the deal.
Competition in this crazy market challenges even the most seasoned agent due to high demand and record low supply. Multiple offers and bidding wars are commonplace, creating frustration for everyone involved.
At Fathom, we empathize with your situation and developed “7 Strategies for Navigating Multiple Offers” as a FREE tool to guide you to positive outcomes for your clients in the current housing market.