How can you help your buyer clients win or avoid a bidding war? In a seller’s market, there’ll be multiple buyers chasing the same attractive, well-priced home. Low inventory and fast markets mean you have to be quick and smart with your offers. You’ll need to prepare your buyer clients for the fact that offering less than the listing price may not be an option.
As in other areas, preparation is the key to success. Sellers and agents don’t want to waste their time dealing with buyers who are not ready, willing, and able to buy right now. Markets can change quickly, and if buyers find a house they love in their price range that meets their criteria, they have to be ready move fast.
Here are a few tips for buying in a seller’s market:
- Pre-Approval: A pre-approval letter from a lender shows sellers that your client can follow through. It’s also handy for establishing a price range. There’s no point looking at or submitting offers on property out of the buyers’ range. Pre-inspections are another way to show you’re serious, gather information for the offer, and skip the inspection contingency clause.
- Do your research: Help your clients by gathering information about other offers, how long the property has been on the market, and the seller’s priorities. Aside from the listing price, what does the seller want to see in an offer? This will help you devise your negotiating strategy.
- Build rapport: Emphasize things the buyers and sellers have in common. Buyers showing sincere appreciation for the property may endear themselves to the seller. After all, it’s the sellers’ home and they likely have an emotional attachment to it.
- Flexibility: Some sellers want to move fast; others need to move slow. Advise your clients that being amendable to the seller’s closing timeline will make their offers more attractive.
- More up-front cash: Earnest money shows the buyers are serious about purchasing this property, and more money signals they’re really committed.
- Don’t dawdle: If you’ve done your homework and the buyers love the house, advise that they move quickly. Delay too much, and another buyer will pounce. Make an offer.
- Strong opening offer: In a seller’s market, buyers should put forward their best offer first unless the listing is wildly overpriced. In seller’s market, you’re unlikely to get a great deal.
More buyers are competing for fewer properties, and sellers can afford to negotiate to get the offer that’s best for them. So how do you make the winning offer in a competitive environment?
Step 1 is to research and get as much done beforehand so you’re ready to move when the right property pops up. And then suggest more earnest money, a listing price or more offer, and tailor the offer to the needs of the seller. If he or she likes the offer and the buyers, and doesn’t have to counter, your client will have a leg up on the competition.
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