This Is War…Bidding War, That Is
Multiple offers on a home your client is dying to have? It’s not an ideal situation, but it’s one you can nonetheless handle. There are plenty of ways to leverage a client’s motivation to win a bidding war. And some are surprisingly easy. Here are eight tips to come out triumphant against multiple bids.
1. Cash is king
Most clients will not be able to offer cash for a property. But for those who can, it is a marvelous bargaining tool that will give them an advantage in a bidding war. It goes without saying that a seller sees an all-cash offer as 100% risk-free.
2. Make sure your clients are pre-approved
Having all the loan paperwork complete in advance is preferable for a few reasons. One, the seller knows your client can afford the home. And two, pre-approval expedites the process, shaving off valuable time.
3. Have a finger on your market’s pulse
Check the comps in the area to see what a wise offer would be. If the property is reasonably priced and the number of houses for sale in the neighborhood are limited, advise clients to pay the asking price or even a little above. In situations like this, it’s best to take a “big picture” view. Don’t dink around, trying to save $1000. If the home is their dream home and appropriately priced, now is not the time to haggle.
4. Up the deposit anti
Have your clients consider depositing more than the typical 1% of the asking price for the refundable deposit. Your clients will be a more desirable choice if they offer 10%, even 20%, if they can swing it. Remind them that they won’t lose the money since it goes to the down payment and closing costs. Plus, a higher deposit goes a long way to showing sellers how committed they are.
5. Cull your contingencies list
Remind your clients that now is not the time to take a tough stand on a home’s cosmetics. Limit deal-breaking items to health and safety issues, not updated appliances.
6. Establish an escalation clause
Ask the seller’s agent to notify you if your client has been outbid so you can counter with a higher offer. Make sure you and your client have established a limit to how high you can go. A word of caution: Don’t waste everyone’s time with a small escalation increment. An extra $500 or $1000 isn’t much of a temptation. Consider a larger sum, $5000, to give your client a true edge.
7. Determine what motivates the seller
Does the seller need to vacate immediately because of a job transfer? Or, does the seller want to remain in the home until the end of the school year? The more flexible your client can be in accommodating the seller, the better the chance their offer will be accepted over another bidder who is tied to a certain timeframe.
8. Write a personal note
Don’t you prefer a handwritten note to a text or email? Well, so does a seller. Have your client appeal to the seller’s heartstrings. Do they see themselves raising their children in the home? Tell the seller. Are they moving to be near aging parents? Share this fact. According to a recent Wall Street Journal article, penning a letter can increase acceptance odds by 52.2%. So why wouldn’t you reach for your stationery?
As you can see with many of the above points, communication with your client is vital. Make sure you have a firm understanding of their financial situation; timeline; and the threshold for home projects, from minor cosmetic changes to major renovations.
Success is inevitable with kwELITE
Your job is to best serve your client. Our job at kwELITE is to best serve our agents, and we do this by providing them the tools they need to succeed. Our agents are the most educated agents in the industry, with daily training sessions, weekly accountability meetings, and one-on-one accountability coaches.
We invite you to see why kwELITE is the fastest-growing brokerage with the most sales nationwide. Reach out today!