Or at least one which survives the first cut!
Much to the news media’s dismay (they've had nothing bad to say about our market recently)…our real estate market here in the Triangle has hit the after-burners and the Spring market has exploded with offers… and thank you Real Estate Gods…multiple offers!
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. One of our associates just this week had a client who was one of twenty offers on a REO property!
Below are a few ways in which I think an offer can be best presented to survive the initial cut.
First and most importantly: Do your own comparative market analysis and be able to substantiate your price. This may sound like a fundamental step, but it is astounding to see proposed professionals in the real estate business allow Buyers to simply pick numbers and then are unable to defend how they came up with these figures. If you cannot verbalize how you reached your price, how do you expect the listing agent to relay your message to the Seller in a positive light?
Second, Ask the Listing Agent for Directions and then Follow them: When you feel they are going to be multiple offers, a listing agent will sometimes provide instructions on how to write up offers which will be most appealing to the Seller. It also shows the ability of a buyer’s agent to follow instructions. Transactions tend to run more smoothly when each agent does what is prescribed for them. People who do not/cannot follow instructions; bring complications to the transaction. The manner in which a Buyer’s Agent treats the Listing Agent could have a bearing on which offers are considered worthy of a response.
Third, do not speak negatively regarding the listed property. Certain REALTORS seem to think the way to substantiate a low offer is to criticize the property. Although it’s not a bad thing to raise your client’s concern about the material facts of the property… how you package that information into an easily digestible message to the listing agent may keep the Buyer on the good side of the Seller.
Saying things like “the property really needs an entire facelift” or finding other faults and being overly critical on them are not wise ways to describe a property your client wants to purchase in a multiple bidding situation. The value is in how you finesse the situation to relay your concerns… and to not offend the Seller… who, by-the-way, can sell it to your Buyer… or to someone else’s Buyer just as easily. An alienated Seller is unlikely to be “negotiable”….
Fourth, write simple offers: K.I.S.S. Do not complicate things with complex offers. There is something to be said about the beauty of a simple and easy to comprehend offer. Trying to artificially inflate the initial price only to ask for a large Seller paid closing cost doesn’t fool most Sellers. Your closing cost credit request may also raise issues with your Buyers lender and have negative consequences at closing time. Sellers want simple, easy to understand offers that makes their lives simpler, not more complicated.
The Fifth and final key: Do not be identified as an offer with a weakness which warrants immediate elimination. Don’t identify yourself or your Buyer as one who will make the transaction more complicated for the other parties. Remember, in a multiple bidding situation, the Listing Agent and Seller not only want a solid, superior offer; but they are also seeking to identify a competent and easy to work with Buyer and Buyer’s Agent; not the incompetent one who will raise issues and prevent a smooth closing.
I hope this information is valuable and the Spring and Summer markets are good to you! Remember to focus on Lead Generation every day.
Eddie Brown ©2012