Winning the Bidding War (From Rismedia)

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Real Estate

It finally happened. Your clients have been viewing property after property for months, and now they’ve fallen in love. They found the house that’s perfect for them and they’re ready to make an offer. Since 25 percent of buyers turn to an agent for the primary purpose of getting help negotiating the price and terms of their purchase (2016 NAR Profile of Home Buyers and Sellers), this is your time to shine.

When your clients are ready to make an offer on a home, a number of things could go wrong and potentially stop the sale indefinitely. Here are three tips to help you assure your clients that they can move forward on their dream home.

Consider Your Loan and Lender
Before anything else, it’s critical that your buyers are pre-approved for a loan. Before they even begin looking at homes, be sure that they’ve gone through this process so both you and they have an idea of what kinds of homes they can afford. While you’re focusing on this step, also remind buyers that they should go through a well-known lender. Getting pre-approved by an obscure company doesn’t inspire trust, nor does it look good when it comes time for the seller to select an offer.

When your buyers are ready to make an offer, suggest that they don’t lead with the highest amount in their pre-approval. Not only does this leave them with nowhere to go if there’s a bidding war, but it also shows your buyers have no wiggle room. If something changes—interest rates rise, other offers bid more, etc. —your buyers will be stuck, since they’ve already maxed out their budget.

Write the Right Offer
Before giving your clients a figure, it’s best that you know the value of the home and the area. A comparative market analysis can help you review how much similar homes in the area have sold for, so you can calculate the best offer. This can ensure your buyers won’t be aiming too high or too low, meaning their offer will stand out from others.

Another way to use the CMA to your buyer’s advantage is presenting it as leverage. If your clients are making an offer that is lower than what the sellers requested, it may be a good idea to present a letter with the CMA when submitting the offer. This way, your clients can explain why they gave the offer they did in a non-threatening way. Sellers can be assured that it wasn’t anything personal; the data just showed that it was a better price than what was requested.

Create a Connection
In the end, buying and selling a home is an emotional process. Sellers are attached to their home because of the memories they made in it. Often, they want to make sure their home is going to buyers who will make the same kinds of memories. Because of this, it’s important for your buyers to sell themselves as the best option. Pointing out every flaw, nitpicking about the little details, and (worst of all) making negative comments about the decor are surefire ways to be ruled out. If a bidding war does break out, the buyers who hold the highest favor will likely win, even if their offer isn’t the highest.

While this process can be challenging, these tips can help you work through even the stickiest pricing situations. As the midpoint of the year approaches, it’s time to check in on your 2017 goals. Are you connecting with enough quality leads near you to meet your sales goals this year? Position yourself in front of buyers and sellers who are actively searching for properties in your local area.