The recent seller’s market has given rise to more and more multiple offer situations, and in many cases, out and out bidding wars.
Bidding wars can be tricky to navigate, especially if it’s your first time representing a buyer in a competitive situation. To help you out, we’ve reached out to a few top producing Realtors and Brokers for their best advice for getting the upper hand in a bidding war.
Here’s what they had to say:
1. Write a Personal Letter to the Sellers
Emily Jones, Realtor, Keller Williams
It is easy to forget that this business is about more than numbers on a spreadsheet, that there are people on both sides of a real estate transaction. Emily Jones thinks of it this way:
“I always recommend that my multiple offer buyers write a letter to accompany their offer. Selling a home is a personal and emotional process, and multiple offers make it feel cold and business like. Humanize your buyer’s offer with reasons why your buyer will cherish and care for the home the same way the seller has. I’ve had multiple clients’ offers win out over higher priced offers using this tactic because the sellers felt connected with them.”
2. The More Financial Information a Buyer Shares, The Better
Jennifer Okhovat, Realtor, Compass Realty
When you’ve got a multiple offer scenario in play, often times buyer’s agents are all giving the same sort of advice. When bottom lines are close, the bidder who is willing to share the most information usually wins the bidding war. Jennifer Okhovat explained it like this:
“The more information you are willing to share with the seller, the better, especially financially. A pre-approval isn’t going to cut it by itself, I suggest buyers include proof of funds for the earnest money deposit and the down payment as well.”
3. Work With Your Lender to Get as Close to Full Approval As Possible
Beatrice de Jong, Director of Residential Sales, Open Listings
Many sellers are anxious to get to the closing table quickly, which is what drives many to a cash buyer, even with a lower price. Take that worry away by working with your lender during the time just before you submit your offer and get the loan process underway early. Beatrice de Jong told us:
“I recommend speaking with your lender before submitting the offer to see how much work they can do upfront to get you fully approved for the loan. An offer with great terms, a great price, AND a packet from the bank showing great progress on the loan is compelling to any seller.”
4. Demonstrate Your Client’s Value to the Community
Maria Velazquez, Realtor, Douglas Elliman
Most sellers have more than just money on their mind when it comes to the sale of their home. They want to make sure that their home will be cared for the same way that they have cared for it, and that the new owner will a good fit for their community. Maria Velazquez shared:
“When my buyers put together a letter to accompany their offer, I always coach them to mention how they would positively contribute to the building and the community at large. Being a good neighbor matters, even when you are getting ready to move, sellers want to feel like their neighborhood is gaining an asset.”
5. Besides Price, Find Out The Seller’s Most Important Term
Jeremy Browne, Vice President, TTR Sotheby’s International
Even though price is key, there are other terms that matter to sellers. When you’ve reached your price limit, try to push your deal to the front by hitting another one of these terms perfectly. Jeremy Browne told us how he best uses this approach:
“Call the listing agent and ask what, besides price, is important to the seller on a contract. If, for instance, the seller has a specific closing window in mind to line up with another purchase they are making, include that window in your contract. Little things like this help sellers feel like they are moving in the right direction.”
6. Waive Your Financial Contingency Period
Melissa Lamb Assael, Associate Broker, Douglas Elliman
In the current economic climate, it isn’t uncommon to hear of buyers who COULD pay cash, but choose a mortgage because money is cheap right now. Those buyers have strategy options available to them that others don’t. Melissa Lamb Assael capitalizes on this for her buyers by suggesting:
“If your mortgage-backed buyer is confident in their ability to get appropriate financing, waiving those contingencies levels the playing field with cash buyers. Often times the reason sellers choose a cash buyer over a mortgage buyer is they want the higher level of certainty less contingencies provides.”
7. Use Social Media to Help Customize Your Interaction
Loretta Bricchi Lee, Associate Broker, Citi Habitats
There is a lot of information about people on social media, much of it public. Encourage your buyers to use some of these platforms to discover things your buyer has in common. Don’t get creepy and OVERDO it, but a subtle connection between the buyer and seller might just seal the deal. Loretta Bricchi Lee thinks of it like this:
“The smallest details are often the most effective. When my buyer discovered that they went to the same university as the seller, I coached her to subtly include where she went to school in the letter she was accompanying her offer with. The seller immediately picked up on it, she ended up getting the house.”
8. Keep Your Remodeling Plans to Yourself
Dolly Hertz, Associate Broker, Engel & Volkers
Part of the fun of home shopping is standing in a space and figuring out what you could do to make it your own. But, don’t let those conversations make their way into the negotiation process. Dolly Hertz warns:
“If you have big plans for a remodel, keep those plans to yourself when speaking with the homeowner. Home selling is an emotional process; sellers can get spooked by the idea that their beloved family home is going to be dramatically changed. If their home isn’t going to be preserved in the way that they’ve loved it, best not to reveal this. Express your true fondness for their home and lead with your best financial offer.”
9. Make a Video Presenting Your Offer
Shelton Wilder, Realtor, Douglas Elliman
If a picture is worth a thousand words, then by our count, a one minute video is worth 1.5 million. Just about any marketer will tell you the engagement from video is sky high compared to other forms of media, so why not use that knowledge to bolster your clients’ offer? Shelton Wilder told us:
“Your client’s offer will stand out in a multiple offer situation by having them make a video – one minute or less – saying why they love the property. They should share why they would truly love to live there, and express that they appreciate the consideration. This personal touch gets me to a lot of closing tables, it’s worked every time!”
10. Buy With Cash
Dr. Carmen Shaye, CEO and Founder, Historic Homes Restoration
With a mortgage comes a lot of paperwork and waiting. A cash offer simplifies all of this, perfectly summed up by Dr. Carmen Shaye:
“In a competitive market, a strong cash offer gets you to the closing table quickly with no financial contingencies and no appraisal, all things sellers want to hear.”
11. Offer Rent Back at an Attractive Rate
Dave Roberson, Broker Owner, Silicon Valley Property Management Group
Possession date is often a point of negotiation in any sale. Sellers want to close quickly and get their funds, but sometimes aren’t able to have their belongings out right away. Dave Roberson told us:
“Try offering rent-back at a free or extremely reduced rate for one, two, or even three weeks. Getting sellers their money faster but slowing down their moving timeline can really sweeten the pot.”
Your Turn
What are some of the techniques you’ve used to help your buyer’s offer stand out and win a bidding war? Leave a comment below, when we come back around and look at this article, maybe your suggestion will make it onto our list!
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