Written by Tara DeSelms
Low inventory and high demand drive up prices and put buyers at a disadvantage in many markets, especially real estate. Real estate professionals need to know how to help homebuyers navigate a multiple offer situation, or they run the risk of losing out on the best properties. Great sales associates know you can win a bidding war by using a few smart strategies.
Here are 5 tips to help any real estate professional in this scenario:
Manage Client Expectations
Since you know your local market, you will know when a property is likely to attract multiple offers. Start the process with your customers by informing them of the possibility of a bidding war. Set expectations early by explaining what happens when multiple offers are made on a home. Help them understand that the seller may take time to review their offer and come back with something else.
Be sure your homebuyers have a threshold price in mind before bidding starts so that you can reference their “best-and-final” offer when emotions get high. Buying a home is always an emotional rollercoaster and even more so when in a multiple offer situation. As the professional, it is important that you keep your cool and provide a steady hand.
Know Reputable Lenders
Make sure your homebuyers are pre-approved and not just pre-qualified. This step lets the seller know that the buyers are truly serious contenders. Great sales associates will know where to direct their customers for pre-approval. Keep in mind that any businesses you recommend will reflect on you, so align yourself with a reputable lender.
Start With A Strong Offer
Naturally, all homebuyers want to get the best deal possible on a home. However, if you think multiple offers will be made, this is not the time to lowball. In fact, if your buyers are serious about the home, it may be time to offer more than the asking price. Increasing the earnest money offer at this time also shows how committed the buyers are to this deal.
Help Your Clients Stand Out
Offering more than the asking price is one way to stand out. Another way is to have your clients write a letter to the seller about why they feel like the house is the one. Buying and selling a home is an emotional process for both parties and sellers often prefer homebuyers who feel a personal connection to the home.
A third approach is to drop additional contingencies in the offer. Commonly waived contingencies are the home appraisal and home inspection. Dropping the home inspection is a big step and should not be done lightly. We recommend a home inspection on all properties, but this tactic is used in highly competitive markets.
Coach Your Clients On Flexibility
With a seller’s market, it’s not unusual for homes to sell so quickly that the home seller hasn’t even found a new home yet. If the homebuyers are willing to work with the seller on closing and move out dates, it could sweeten the deal.
In any multiple offer situation, there will only by one winner and multiple losers. However, with these tips a real estate professional can work on their customers’ behalf to stand out and win the deal. Some of the happiest customers are those who won a multiple offer deal, because they know they could not have done it without you.
About Tara DeSelms
Tara DeSelms began her real estate career at the age of 8 by putting stamps on the envelopes her dad Terry DeSelms was sending out to his clients. You may say that real estate is in her blood. She has assisted Terry as he transformed DeSelms Real Estate into the No. 1 Real Estate Team in Middle Tennessee for the past 15 years. Find her at http://deselmsrealestate.com.