All is Fair in Love and Bidding Wars
Anyone in the real estate business should be aware that the competition will employ a number of strategies to win a bidding war for their client. Agents can counter with strategies of their own or eventually make the decision to walk away from the negotiation table. Let's take a look at a few key tactics that can help agents win bidding wars. One simple way that an agent can make for his client's bid to stand out from the competition is to complete and submit all loan paperwork and ensure that all of the financial details are in place. This method should be done before an offer is made. An agent who can convince his client to pay predominantly or completely in cash will have a significant edge. When making the offer, don't attach numerous contingencies as it could scare or annoy the seller.
Buyers who waive certain contingencies like the home inspection contingency will receive preferential treatment from the seller. An agent who can convince his client to consider a delayed move in date will also have a leg up the competition. Sometimes, sellers need a few months and, even, up to half a year to move into their new home. Coordinating a move out day from the current home with a move in day into a new home is a tricky process. Buyers who are willing to accommodate the schedule of the seller might garner more consideration.
Some agents are even able to persuade their clients to allow the sellers to stay in the home after the closing date while paying rent until they can move into their new home. One of the most underrated and neglected bidding tactics is the individualization of a client's offer. When anticipating a heated bidding war, agents who can convince a client to write a letter to the sellers explaining why their family wants to live in the home will be at an advantage.
Offers submitted with such a letter and possibly even a picture of the family might tip the scales just enough to convince the sellers that they can feel good about the family eventually living in the home. Clients who are willing to bump up the earnest money, also known as a good faith deposit, will appear to be more serious about buying the home than competitors. Earnest money is a deposit made by the buyers after their offer is accepted. Those who boost their earnest money beyond the typical 1 to 3 percent will be viewed as legitimate prospects.
A potential buyer who is willing to increase his earnest money to 10 or 20 percent will make a significant impression on the seller, especially if the seller has had flaky buyers in the past. Another effective bidding tactic is to pay for the home warranty and transfer taxes of the sale. Those who want to make their offer stand out will cover all of these costs or part of them.
Some prospective buyers will even sweeten their deal by offering to reimburse the seller's moving and professional stager’s cost. Stagers are often hired by home sellers to clean up the house, so that is presentable to potential buyers. Buyers who are willing to accept some of the furniture that the sellers no longer want will also be at a competitive advantage. Oftentimes, sellers don't want to move certain pieces of furniture or appliances to their next home due to old age, malfunction or general disinterest.
Clients who make an offer with a statement that expresses their willingness to bear the costs to get rid of these items will make life much easier for the seller. These are just some of the tactics that real estate agents use to win bidding wars. With some practice, you too can win over home-sellers. Who knows? In time, you may come up with some creative tactics of your own.
