As a Marin County Top Agent, I have had great success with getting my offers accepted in a low inventory, high demand market that is experiencing multiple offers on many of the lower priced properties. When I recently opened a second office in Scottsdale, AZ, I soon learned that the same market conditions were present for the lower priced properties in this well-known resort community.
In order to prepare my buyers for this competitive market, I have stressed a proactive approach to the search which assures them that we will find a property, even if it takes several rejected offers and requires a flexible approach to our search parameters.
The most important activities in a successful real estate property search include:
1. Clients should prepare a thoughtful list of priorities for their new home to discuss in detail with their agent. In that discussion, the agent can advise about price ranges for the combination of “wants” and get the buyers to a list of “needs.” This is time well spent prior to looking at properties.
2. Have clients do their homework by driving through neighborhoods and researching schools so they can narrow their search to a handful of good locations. No matter what the market conditions, location trumps any other criteria for buying a home. In a low inventory market, several locations should be considered. If the search is too narrow, the buyers will get frustrated at the lack of choices and may even become discouraged about buying a home.
3. Assemble a team of experts including mortgage brokers, inspectors, insurance agents and title companies. Then, your team can assist you and your client in a smooth transaction. An excellent mortgage broker, with a track record, can pre-approve your client so they are prepared to make an offer on a home that they can afford to buy. If they don’t obtain a pre-approval, then they are not ready to buy.
4. Encourage clients to make offers on homes that meet most of their priorities… even if it is not the “perfect” house. They will soon find that there is no perfect house and no two are alike. If your client finds a home and makes an offer that isn’t chosen in the multiple offer stampedes, there is always another home that will soon come on the market that will meet their needs.
5. Prepare a strong offer only after studying the closed sales and determining what percentage of the asking price the transactions are closing for. In some markets, this requires coming over the asking price; in others, slightly under. A clean offer includes: as few contingencies as possible, a quick close (30 days or less), loan pre-approval, proof of funds for either a down payment or cash sale, and an “as is” addendum to assure the seller that the buyer is fully prepared to purchase the home in its present condition. If a report later reveals a significant issue with the property, the buyer can negotiate a credit or simply cancel the transaction.
6. Lastly, help prepare a strong cover letter from the buyers themselves, highlighting the reasons that they love the property. The letter will often convince the sellers that the offer is sincere and their beloved home will be passed on to owners who will love it as much as they have. The Top Agent should pull together the offer and the supporting documentation with their own cover letter, stressing their years in the business and closing success rate and an accepted offer will soon be the result.
We’d love to hear from you. What other techniques have you used successfully in multiple offer situations?