5 Tips On Winning Multiple Offers
Editor’s Note: This content was written as allowed by the Canadian Fair Housing Law. Please check your local Fair Housing Laws before implementing any of the following tips.
It’s a seller’s market out there! Homes in most markets are selling for over asking and getting multiple offers is too common. For sellers, this is great news! When a home is presented to the market and everything is done right: good staging, open house schedules at bay, and reasonable price for instance, the chance of getting multiple offers arise. Recently we had a listing that was shown 80 times in one week and resulted in 7 offers!
Multiple offers normally mean happy seller, but only one lucky buyer, how can your buyer be that lucky one?
1. First Things First- Is Your Client Approved for the Loan?
Always make sure your buyer is financially approved, NOT just pre-approved. Refer your buyer to work with a MORTGAGE BROKER. They are the professionals when comes to mortgages and they know the ins and outs of mortgages. Not all financial advisors from the bank can handle complicated mortgage deals and some deals do require a certain level of knowledge and expertise. We have two mortgage broker teams that we work closely on a regular basis. They work with us seamlessly, often clients get rejected by the bank; these clients will always find a solution with these mortgage brokers.
2. Be in the Know!
Ask questions – lots of them. Make sure you understand what is important to the sellers, what they are really looking for when it comes to closing the deal? For example, what are the preferred closing dates? What are some of the included or excluded items in the purchase of the home? Any other terms that’s on the seller’s wish list or find out anything outside of price that can help sweeten your deal. This will greatly impact the finality of the entire deal. On the last multiple offer situation our buyer was in, our buyer won because we agreed to let the sellers rent back the place for 6 months at minimal rent.
3. Know Your Market and Educate the Buyer!
Remember, winning multiple offers price is the key. You need to become the market expert even if this isn’t your farm. Be sure to study the recent sales history in the entire neighborhood; a Comparative Market Analysis (CMA) can come handy. A CMA is a tool commonly used to price a home for the sellers, why not use it for the buyers as well? Use stats, number of listed homes VS sold homes, list price VS sold price, etc. The more knowledge/information that you have, your buyer will be more confident in you. Go the extra mile, your buyers will appreciate it.
Next, make sure to keep in mind, there may not be a second round. Always educate your buyer on why it’s in their best interest to put their best foot forward in theses situations. The last thing you want is to lose out on the multiple offers by a small margin. A little trick that has worked for us in the past is add on $100 onto your offering price. For example, if you want to offer $400,000, but most likely another party is thinking the same number, why not offer $400,100. That $100 can be your winning ticket.
4. Do Your Homework.
Now that you’ve educated your clients on the price, what about subject conditions? Be on the lookout – the fewer the subjects, the stronger the offer is. With the current real estate market, it is very common to encounter subject-free offers.
What is a Subject-Free Offer?
A subject free offer is an offer prepared by the Buyer that does not allow the buyer to walk away for ANY reason if the Seller accepts.
What Does it Take to Submit a Subject-Free Offer?
As agents, you need to do your homework. Remember I talked about having a trustworthy, capable mortgage broker work with you side by side? You will also need a good inspector, insurance agent, lawyer and accountant. You can’t do this alone.
- Mortgage Broker – get you the loan
- Home inspector – often pre-inspection is recommended prior to offering
- Insurance agent – make sure the house is insurable
- Lawyer – verify/check title, address any legal issues prior to offering
- Accountant – any tax questions, accountant is the best person to ask
Now all subject conditions can be fulfilled and you are ready to submit a subject-free offer. At this time, if you haven’t already, have a real estate lawyer get involved. You’ll want to make sure you have your buyer sign a separate written disclosure statement that they are aware this is a subject free offer and that you have done your due diligence to advise them.
5. Add a Personal Touch
If the listing agent allows, get yourself in front of the sellers and present your offer in person. This can help stand out from the crowd and keep your buyer’s offer at the front of their mind. Another way to stand out is by having your buyer write a letter about themselves. Paint a picture in the seller’s mind of who will be buying their home; this may just be the last bit to help your buyer’s win! But whatever you do, don’t lie and don’t make up stuff. Not only it is unprofessional but it could backfire at you later on.
Other Helpful Tips
- Make sure your buyer acknowledges receiving the Comparative Market Analysis (CMA) so you know they have an understanding as to how to come to their decision on price. As a real estate agent, your job is to guide them, not to make the offer price decision for them.
- Document everything in writing. We are all humans and we make mistakes so get in the habit of taking notes, time stamping it. It’s easier to document it now than back tracking it later on.
- Don’t play games! No one likes having their precious time wasted. Always be honest and professional with both your buyer and the seller.
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