Navigating Bidding Wars During a Hot Real Estate Market
As the real estate market continues its hot streak, homes are selling faster and receiving more offers than ever before. With listings receiving multiple offers, you have to make your client’s offer be the one that stands out.
Keller Williams real estate maverick, Alexis Bolin, joined us this week on a Secrets of Top Selling Agents webinar to discuss what you can do to navigate a hot market and distinguish your client’s offer from the others.
Finding Homes for Your Clients
Yes, as a real estate agent, you can always find listings that your client may be interested in. But if your market is like Bolin’s, where a home can sell within a day of being listed, then you may have to explore some even more proactive options to find your client a home. Bolin suggests a few places where you can beat a bidding war by finding a home that might not be listed yet.
Coming Soon: Homes that are listed as coming soon in your MLS are technically not allowed to be shown but can accept offers prior to showing. Bolin suggests writing an offer on a home that your clients might be interested in prior to the home being available for showings. Do not write an offer on a home that your client is not interested in.
Expired or Off Market Listings: Bolin suggests taking a look at listings that expired or been taken off the market over the last couple of years. With the market as hot as it is, the homeowners may want to sell now and get the offer that they are looking for.
New Homes: New homes that are under construction may have buyers that fall through. By getting to know the site agents, you gain access to the ins and outs of what homes need to be sold or what homes may have fallen through with their buyers.
Rentals or Vacation Rentals: Owners may be struggling to cover the expense of maintaining a second home due to the pandemic. Use these as an opportunity to see if the owners may be interested in selling. You can use this opportunity to get ahead of other offers.
What Motivates Your Buyers and Sellers?
If any of the options above haven’t helped you find a home early to avoid bidding wars, you may have no choice but to work with the homes that are available now—and that’s okay. Before you get into the weeds of a bidding war, take the time to find out what your buyers and the sellers may want out of the transaction. Take the time to explain the current market conditions to each of the involved parties to help your client determine how to move forward in this market.
Handling Multiple Offers
Bolin explained that your clients may feel entitled to know if there are other offers on a home before they can make an offer. This is not the case. If the listing agent is allowed to disclose the other offers, make sure to obtain written approval from the seller before discussing this.
Bolin also suggests meeting with the buyers and sellers to determine a game plan should you run into a multiple-offer situation. You want to discuss all scenarios with both sides to make sure that both the buyer and seller are getting what they want. If needed, show previous offers that were declined so your client can make an informed decision. Writing the Winning Offer Now, let’s say your client has found a home that they love and they are prepared to write an offer. Bolin suggests that your client should give their highest and best offer. If your client is good with paying a certain amount over the listing price, Bolin suggests writing an offer with that amount in the offer. You want your offer to stand out with the highest and the best you can offer.
Your client should also come prepared with a few other things: a pre-approval letter, earnest money deposit and, if they are paying cash, a proof of funds document. Bolin suggests that the higher earnest money deposit your client makes, the more the offer may stand out. In some cases, Bolin suggests a deposit of $5,000 to make your offer seem strong. Additionally, a pre-approval letter must be ready to go so that the seller can know that your client is taking this seriously.
Handling a market this hot can be incredibly stressful and may take some time. But you have to come prepared with an offer for your client that will stand out above the rest. Hopefully, with these tips, you will feel ready to tackle multiple offers and get your clients the homes they desire.