Buyers in bidding war? 15 tactics to help stand out to a seller
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Buyers in bidding war? 15 tactics to help stand out to a seller

Although the real estate market is red-hot, we can improve our odds by presenting a deal that directly helps the sellers. Addressing price, time, convenience and certainty can go a long way in positioning a winning offer.

In a seller’s market like the one we find ourselves in, buyers will likely find themselves on the losing end of a multiple-offer negotiation — unless they make their offer stand out from the crowd.

To help them avoid the disappointment of missing out on a home you love, you can use a number of different techniques to make their offer more attractive.

Co-founder and COO of Path & Post Real Estate out of Woodstock, Georgia, identified four things sellers tend to concentrate on, and by addressing one or more of those four things, we can make offers stand out in a crowded field.

The following is a breakdown of the four areas sellers tend to focus on, and how to submit offers that are more focused on the sellers’ needs and desires, making them more attractive to the sellers.

Money

Maximizing the sales price is often the seller’s main priority. When maximizing the sales price is the sellers’ focus, don’t hold anything back.

We may only get one shot to compete for the property, so offering the highest and best price in the initial offer is often the best option. The following are a couple strategies you can use to make sure your offer stands out to the seller focused on price.

1. Escalation clauses

Escalation clauses are a great way to be as competitive as possible with regard to price. They provide an opportunity for buyers to win in multiple-offer negotiations even if their first offer price is not the highest price received. Brokerages may have different rules about these, so check with your Broker to understand your options.

2. Appraisal gap guarantees

Appraisal gap guarantees assure the seller that if the house appraises for less than the agreed-upon price, the buyer will pay the difference between the two.

This provides the seller some assurance the deal will close even if the home’s appraisal falls short of the contract price. The appraisal gap guarantee can make your offer more attractive even if the competing offer has a slightly higher price.

3. Seller’s closing costs

Offer to pay some or all of the seller’s closing costs. Price is one thing, but the bottom line net to the seller is what really matters. Buyers who are willing to pay some or all of the seller’s closing costs can make themselves more competitive by directly impacting the seller’s bottom line.

Timing

Sometimes sellers have certain dates they need to close by or after to meet their circumstances. Buyers who can be flexible with their own timelines can stand out from other offers by giving the seller additional control over the closing dates.

4. Closing date window

Provide a window for the closing date, allowing the seller to set a closing date anywhere inside a three to four-week period. Sometimes cash buyers assume that a quick closing is ideal, but the sellers need more time to move out of the home.

Flexible closing dates can remove that pressure for the sellers and make a buyer’s offer more attractive.

5. Post-closing move-out date

Leave room for the seller to be out of the house after closing. We can do this by scheduling the date to take possession of the house at some point after closing, or by allowing the seller to lease the house back from the buyer after closing for a short period of time.

If, for example, you can schedule a closing on Friday but arrange to take possession of the house on the following Monday, you’ll leave the seller space to fully vacate the property without the extra pressure of moving and closing on the same day.

Understanding the seller’s needs in regard to timing can help us sweeten your offer by addressing the seller’s needs or desires.

Convenience

Sellers want as few hassles as possible in the closing process, so anytime we can remove the potential challenges involved in selling a home, we can position our offer to stand out.

The time and price issues we previously mentioned will overlap here to a certain extent, so if we address those challenges, we may be addressing convenience as well.

6. As-is contract

Increase the seller’s convenience by eliminating the concern of possible repairs called for in the home inspection. Choose an as-is contract with a short cancellation period to help avoid the likelihood of extensive repairs to the property, but also give the seller some comfort that the transaction will be smooth for them.

The as-is contract assures the seller that the buyer won’t ask for any repairs to the home, which provides flexibility and convenience for the seller.

7. Seller’s own home search

Overcome the biggest objection most sellers have now which is they aren’t sure they can find another home for themselves if they sell theirs. Flip the typical contingency so that instead of protecting the buyer’s ability to sell a house, it protects the seller’s ability to find a new property within a 30 or 60-day period.

This provides the seller the confidence that they won’t be left without a home to live in because of the contract. What we often find is that as soon as the seller’s home goes under contract, they become less picky because they see the likelihood of making money on the sale of their home, so they focus on the must-haves in their own home search instead of only the like-to-haves.

Certainty

Sometimes the seller wants to have certainty that the closing will happen as the contract reads. Sellers prioritize all-cash buyers because those deals are more likely to close, which makes them more attractive to the seller.

8. Cash offer

Programs like Home Partners of America and Ribbon Home can help us turn a buyer’s offer into a cash offer that will help win a multiple-offer situation. These programs will cost the buyer a little bit extra, but they provide certainty to the seller that the deal won’t fall apart because of financing.

9. Bridge loans

Bridge loans allow buyers to get a loan on the equity in their existing home which can make them like cash buyers by eliminating the uncertainty of financing.

10. Guarantee/Penalty

Offer a guarantee that if the sale doesn’t close on the set closing day then you, your agent will pay a penalty to the seller. Mary Maloney, the founder and owner of Hometown Realty powered by EXP in San Diego, California, suggests a $5,000 guarantee that the home will close on the agreed-upon date.

11. Approved financing

Have your financing completely approved as soon as possible. If you're are able to have complete confidence in your financing going through, then consider removing the financing contingency.

Removing the financing contingency will give the seller confidence that you will close as the contract states.

Beyond the offer

Everything we do related to the offer has the potential to impact the contract, so if we get impatient with the listing agent or respond badly to something, our chances decrease. Here are a few ways to build rapport and confidence with the listing agent.

12. Patience

Be patient with the listing agent. They are dealing with multiple offers.

13. Communication

Communicate to all parties that you will do everything in your power to create a smooth transaction.

14. Letters

Write a letter explaining what they love about the house. This personal touch has the ability to create a bond with the seller and make the offer stand out from the others. This strategy is not for everyone, but I have seen offers accepted that had lower prices and less advantageous terms by sellers due to their connection with the buyer from the letter.

15. Going the extra mile

Last but not least, go the extra mile on a multi-offer property. If you provide as much information and assistance to the other agents possible, those agents will remember the effort we made, and it can help your offer stand out.

Although the real estate market is red-hot, buyers can improve odds by presenting a deal that directly helps the sellers. Addressing price, time, convenience and certainty can position our offer to win the home, and building relationships with the listing agents can do the same.

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