You found the house you love - but so did 6 other buyers. How do you compete?
A good Realtor knows it’s not just about price. Buying and selling a home can be an emotional decision as well as a financial one. Here are some ways we compete with other agents to give our buyer clients an advantage.
Trust and communication are key. If you don’t trust your agent, get a new one, or tell them how you feel. It’s possible it’s a misunderstanding. When we begin to work with a new client, we like to take the time to talk about the market and where it is at the moment. Is it a buyers market, a seller’s market or does it depend on the situation? Knowing what your market is like ahead of time puts you in the right headspace to win when you’re competing for a property. Usually, just the fact that you are competing means its a seller’s market, but it may not be that simple.
Tips to win!
Get preapproved. This is key really for any offer, but in a multiple offer situation, the pre-approval is critical. No seller is going to pick “I know I’m good for a loan” over “My lender has already pre-underwritten me, all I need is the address”
A clean offer. There should be no blanks, missing dates, TBD, pending disclosures, etc. The offer should be completely filled in with all possible information, all exhibits, and disclosures signed and included with little to no special stipulations.
Pre-schedule a home inspection. Informing the listing agent that you have an inspection scheduled already pending acceptance of the offer tells them you are serious and committed. Especially if it’s with a reputable inspection company.
Call the listing agent. Your agent should talk with the listing agent and ask “What do the sellers need?” Sometimes, it’s not about the money. Maybe a flexible close date, or delayed occupancy, or a specific closing attorney. Some listing agents won’t say, but it doesn’t hurt to ask. We have won several deals just because we took the time to talk to the agent, on the phone. Not text. Not email. Has to be in person or on the phone.
0 Day Due Diligence. Consider a 0 day due diligence period with an inspection clause that will only ask for repairs of a safety nature, so the seller knows you won’t back out for nitpicky items.
Cooperate with Listing Agent. Do what the listing agent asks you to do. If they have included a checklist of items necessary to submit a listing, then do it. It might be a pain, but there is probably a reason behind the list and unless there is something objectionable, showing good faith to work with the seller up front goes a long way. Usually, there is a form to fill out for a relo company, or maybe they want you to prequalify with their lender to assure that you can in fact close on the home. If there are concerns, the listing agent should be able to explain them.
Skip the appraisal protection. Remove the appraisal stip and offer to pay the gap if necessary, if you are financially able, or offer to pay a certain price above appraisal not to exceed a certain amount. This protects the seller from people saying they will pay way over asking price and then allowing the appraisal to rescue them down the road.
Conventional financing. If you can get a conventional loan, sellers usually prefer that over FHA and VA.
Consider an escalation clause. Basically, that says “I’ll pay X amount more than any other signed offer you receive up to X sales price”.
What not to do!
Write a letter. Now, here I’m being a bit of a hypocrite. I’ve had buyers write letters and sometimes they work, but it’s a gamble that can backfire in both the buyer’s face and the agents. Agents open themselves to Fair Housing based lawsuits if the offer with the letter doesn’t get chosen, or sellers may choose another offer because something in the letter annoys them.
Harass the listing agent. Believe it or not, calling the listing agent 4 or 5 times a day, doesn’t make your offer stand out… in a good way.
Demanding your offer be presented immediately. Yes, the law says that all offers must be presented in a timely fashion. Timely fashion is a flexible term. Telling anyone else, how to do their job usually doesn’t make friends.
Play with the numbers. Offer a crazy amount over the asking price and ask for closing costs. Unless you’re prepared to pay over appraisal, this isn’t going to win. Listing agents and sellers can do simple math and are looking at the net deal.
These are all tips for putting together an ‘aggressive offer’. When working with my clients to write an offer on a property, I will often ask, “How bad do you want this home on a scale of 1-10”. The higher the ranking, the more of these tactics may be necessary. Please make sure you understand what you are offering. If you have questions and your Realtor can’t answer them to your satisfaction, keep asking questions until you are clear on what you are offering.