Five Tips to Win a Real Estate Bidding War!

Here’s a great article from RealTrends this week:

Low inventory and high demand drive up prices and put buyers at a disadvantage in many markets, especially real estate. Real estate professionals need to know how to help homebuyers navigate a multiple offer situation, or they run the risk of losing out on the best properties. Great sales associates know you can win a bidding war by using a few smart strategies.

Here are 5 tips to help any real estate professional in this scenario:

Manage Client Expectations

Since you know your local market, you will know when a property is likely to attract multiple offers. Start the process with your customers by informing them of the possibility of a bidding war. Set expectations early by explaining what happens when multiple offers are made on a home. Help them understand that the seller may take time to review their offer and come back with something else.

Be sure your homebuyers have a threshold price in mind before bidding starts so that you can reference their “best-and-final” offer when emotions get high. Buying a home is always an emotional rollercoaster and even more so when in a multiple offer situation. As the professional, it is important that you keep your cool and provide a steady hand.

Know Reputable Lenders

Make sure your homebuyers are pre-approved and not just pre-qualified. This step lets the seller know that the buyers are truly serious contenders. Great sales associates will know where to direct their customers for pre-approval. Keep in mind that any businesses you recommend will reflect on you, so align yourself with a reputable lender.

Start With A Strong Offer

Naturally, all homebuyers want to get the best deal possible on a home. However, if you think multiple offers will be made, this is not the time to lowball. In fact, if your buyers are serious about the home, it may be time to offer more than the asking price. Increasing the earnest money offer at this time also shows how committed the buyers are to this deal.

Help Your Clients Stand Out

Offering more than the asking price is one way to stand out. Another way is to have your clients write a letter to the seller about why they feel like the house is the one. Buying and selling a home is an emotional process for both parties and sellers often prefer homebuyers who feel a personal connection to the home. A third approach is to drop additional contingencies in the offer. Commonly waived contingencies are the home appraisal and home inspection. Dropping the home inspection is a big step and should not be done lightly. We recommend a home inspection on all properties, but this tactic is used in highly competitive markets.

Coach Your Clients On Flexibility

With a seller’s market, it’s not unusual for homes to sell so quickly that the home seller hasn’t even found a new home yet. If the homebuyers are willing to work with the seller on closing and move out dates, it could sweeten the deal.

In any multiple offer situation, there will only by one winner and multiple losers. However, with these tips a real estate professional can work on their customers’ behalf to stand out and win the deal. Some of the happiest customers are those who won a multiple offer deal, because they know they could not have done it without you.

Great advice! Good luck out there!

David M. Hassler

VP, Professional Development

The Peak Producer "Rhythm of the Referral System"

Our Peak Producers training focuses on the key difference in truly Working By Referral versus the old “word of mouth” approach most of us fall into. The problem with the latter approach is that we’re still waiting for the phone to ring! When we work proactively t0 generate referrals, the goal is to develop a steady stream of business. To do that, we want to get into an ongoing flow, or rhythm, of a systematic approach. Here’s how:

1.    Add people to your database! Those weekly contacts with our client care database are the basic ingredient in the recipe for consistent business and growth. One hour of this kind of sales and marketing activity—the CEO or Rainmaker hat—is worth five hours of excellent client service—the COO or dealmaker hat—to building a consistent business.

2.     Build relationships! Through our consistent contact and care for your relationships so they come to trust and value us professionally.

3.    Provide excellent service! The basis of trust and value is our excellent service and commitment to our clients’ goals starting during a transaction—the COO hat—but also beyond as we serve them as their long term real estate adviser and show them how much we appreciate our relationship even when there isn’t a commission check at stake.

4.    Ask for referrals! Here’s where most of us stop, either because it feels a tad uncomfortable or because our COO hat gets so heavy we can’t lift our focus from the whirlwind of transactions. But that’s like putting all your hard earned dollars under the mattress instead of investing them and letting them work for you! Remember, if you don’t ask, you don’t get!

5.    Receive referrals! Yes, be open to referrals! So often, we get into a service mentality and don’t want to seem like we ever need anything from our clients. Remember, anyone giving us a referral really likes us to begin with and they want to see us succeed.

6.    Acknowledge and appreciate the referrer! Don’t wait to see if we get an actual client and make it to the closing table! That’s rewarding the results—and can be several months after someone gives us the referral. Instead, reward the behavior—their thinking of us and giving us the referral—and do it immediately so the referrer sees how much we appreciate their behavior.

7.    Turn that new lead (referral) into an advocate! Now that we’ve shown our client what excellent service really is, don’t treat the closing as a funeral! Remind them we love to help folks like them and how referrals allow us to focus on always providing the best service. Add them to your ongoing client appreciation program and keep in touch! (And yes, ask for referrals!)

Just keep this ongoing rhythm going with these seven easy steps to success in your career and a great life!