I wanted to share this article that i wrote over a year ago and i think that it is even more true move than ever before so here it is: Today more than ever real estate agents have to be more creative and clever to get their offers accepted. With the inventory of listings being low, Agents are experiencing multiple offer situations and bidding wars.! Individual REALTORS and Sellers often handle multiple offers in various different ways. If there are numerous offers, rather than making individual counter offers, some Sellers eliminate offers on the first cut and leave only the best offers with which to negotiate. For example, one of our agents this week had a client who was one of 4 offers on a property!
Below are a few ways in which I think an offer can be best presented to survive the initial cut and go to the final round and acceptance.
1. This is a very important part !!! Call and ask listing agent for directions on anything special writing up offer and where they want offer sent to. The manner in which you treat the Listing Agent could have a bearing on which offers are considered worthy of a response.
2. Ask listing agent to find out what’s important to the seller (price, terms, closing date, etc.) and then draft your offer around this information.
3. do not speak negatively regarding the listed property, on the contrary, you should tell agent how much the buyers loves the property and how much they want it.
4. Get a Desktop Underwriter Approval Letter- have Desktop Underwriter (DU) approval from your lender. DU approval is more than just your typical pre-approval. DU approval is an extra step that demonstrates your buyers are organized, proactive, and ready to close escrow.
5. Leverage Your Lender – Hopefully you have an aggressive mortgage professional who understands their role in assisting you to present the offer. The lender should be calling the listing agent to make sure they received the offer, assuring the listing agent that your buyers are solid , and answering any questions they may have. If there are 10 offers on a particular home, your lender will make a big impression if they are the only one that follows up with the listing agent. You can even take the extra step of having your lender shoot a quick introductory video assuring the seller of the buyer’s qualifications and then send it to the listing agent. This can be done right from their desk using their iPhone or webcam and is quick, easy, and effective.
6. Make your offer as “clean” as possible. Don’t ask the seller to pay for your home warranty, and the homeowner’s association’s transfer fees, and your lender’s fees, closing cost etc.(unless needed)
7. Don’t ask the seller for their personal property (refrigerator, washer, dryer, etc. unless needed)
8. The typical contingency period is 21 days long. Consider shortening the inspection period to five or seven days.
9. You may have to offer more than the list price. ask agent what price or range your clients need to be to squeeze out competition.
10. A typical earnest deposit is 1% of the purchase price. Give the seller more than this, as much as possible, to show you’re financially strong and serious about buying the home
11. Shock Listing Agent and Hand-Deliver the Offer and make a Face-to-Face visit with listing agent. Ask listing agent to allow you to present offer to seller and you will make listing agent look like “the best agent in San Diego” if he allows you. The art of hand-delivering real estate offers has largely been lost. It could be what makes you stand out from the crowd. Remember, the seller is not only picking a buyer to work with but also a buyer’s agent. The more professional you come off the greater the chance for success.
12. If you feel confident in the price you’re offering, waive the appraisal contingency. I strongly urge you to try to stay away from this, unless, you have a super strong lender that guarantees closing and you are 100% certain escrow will close. fyi you have 4-6 other contingencies that you can use to cancel and get your deposit back.
13. Add an “escalation clause” to your offer that outbids any other offer up to a given price. For example, “Buyer will pay $500.00 over any offer up to $200,000.” check with your broker for a recommendation on the specific language to use before doing this.
14. Offer to Release buyers earnest money deposit upon acceptance of offer. remember deposit is still refundable unless you remove all contingencies.
15. Make a larger down payment than what is required for your loan program.
16. Offer to buy the home in as-is condition. it doesn’t mean you can’t have the home inspected or cancel the contract, and get your earnest money deposit back if you find something wrong with the home and notify the seller during your contingencies period.
17. Agree to get pre-qualified with the listing agent’s preferred lender. This doesn’t mean you have to finance the home with the listing agent’s preferred lender(unless it will help get your offer accepted ). It will just reassure the sellers that you really are qualified to purchase their home. or maybe you do want to use sellers lender to get offer accepted.
18. Write a “LOVE” letter explaining why buyers chose the seller’s home and why buyers want to live there. You may even include a photo of buyers family, if buyers feel comfortable doing this. While sellers aren’t going to take a lower offer because of a letter, it could make a serious offer stand out against the competition.
19. Offer a Closing Day Guarantee- if escrow does not close by this date the buyer or the lender or you will pay $($50-$500 a day, wow that much? yes that much if you have a strong team)
20. Try to meet and Connect with the sellers when showing the home.- remember we are in Human Relations Business !!
21. Get Your Broker or Manager or Mentor Coach, who ever you call for support, have them call the listing agent and confirm the offer and notify the listing agent how the buyer is “golden” and the loan is “golden” and how they will be there to support and make everything goes smooth, you will be suprised how much this help since it makes you look Strong !!!
Wait the article says 21 ways to get an offer accepted not 22 ways ?? whats going on?
well i was hesitant to include #22 just because i really dislike using #22 as an option, however i have personally used it and has worked a few times and believe me i really use this only under special circumstances that are necessary only under a “perfect storm” type scenario and you play the George Clooney character or maybe not George Clooney dies.
22. Give up all of your commission . of course not, im joking, hopefully not all of it but sometimes you may have to give a small portion or maybe big portion! depending on future business from this particular client, getting this property for this buyer could mean, you selling 6 other properties to other friends and family? maybe ? something to think about.
Remember Offers often look the same on paper, and you want to set yourself apart !!! you want your offer to be different from the rest of them !!!! remember it doesnt always has to be better, just different.
Good luck and go Attack the Market !!!!! call me with any questions 😉