Multiple offers for buyers
All righty, we promised you and we must deliver, and this is where Shana takes over multiple offers from a buyer’s perspective.
So we talked about what to do from a seller standpoint. But let’s not forget your buyers who are also experiencing multiple offers. And speaking of a beat down, it can be a total beat down. If you have attempted to know if you’ve gone through that process and you’ve attempted to offer several times that it can be exhausting. Right. So I think one thing that’s key to to help is to have a conversation up front and set these expectations right. We talk about the importance of communicating and proper expectations. And it really it really helps for a smooth process. So we want to make sure that we prepare them on what could happen. And, you know, you hear different things from different buyers. You know, in the beginning, they’re all excited and they want to get their offer in and go through it. And then, you know, if they don’t get it each time they start getting beat down a little bit more.
So setting the expectations up front, letting them know what could happen, letting them know that, hey, you may go through this two, three, four, 10 times, but don’t give up. This is the process. And I like to always tell people that if if if it’s meant to be, I think it’s going to it’s going to work out. Right. If it’s not, then let’s move on. Means something else is better out there. So you almost have to just kind of be their cheerleader and encourage them and and help them not get beat down through this process because, you know, it’s a big letdown if they feel like this is the one and then they don’t get it, they may even not want to look anymore. So I think, you know, if you if you set these expectations up front and tell them don’t be discouraged, if you go through this several times and prepare them, prepare them for it.
So attitude and it’s probably important and especially your attitude towards the whole thing.
And I, I like to this is what I do with my buyer clients is, you know, before we offer, I say, hey, we’re going to go into this and I want you to ask yourself, do you love this house? And you just can’t live without it, right? Or are you OK if you don’t get this house? So that kind of tells you where they are and how they feel and kind of their emotional state with this particular property.
I hear you talking about some things from time to time. You’ll ask them, do you like this property or you love it? All right. So talk about what that kind of means. And that’s like if you’re going to offer or not.
You know, if somebody says, Shauna, we have looked and looked and I love this house. I want this house. And then you say, OK, well, you got to give it everything you’ve got, right. And you’ve got to go for it, which means you could pay above what it will appraised for it. You know, you’re going to deplete all of your savings, you know, just let them know whatever it is, this is what you’re going to have to do. And it’s really important that you let people know where they are in the range of pricing. So if they you know, if if they’re having to go above, what does that look like if they need to sell in the next year or, you know, three years, five years, what does that look like? What are the obstacles? You know, let them know everything that they should be facing so they can make that decision. If it backs like a busy, busy street and they love it, you might say, you know, going above could hurt you if you go to resell it in the future. So, you know, you just want to you want to be very forthcoming with your clients and let them know all of these things. All right.
So I do have something to add in here, if you don’t mind. I know you’re rolling through some items here, but I like to add in when I’m having a discussion specifically with the buyer and the with the buyers, and I’ll just go with a super generic setting where there’s a husband and wife and often what I try to do to kind of gauge that. So once they’ve said they love it, right, and we know we’re here, then you can gauge how much they love it by letting the husband look at the wife.
And you directly ask that question, boss. Right. And yeah. So you’ll have like one party turn to the other party and you’ll say, like, how much do you really want? And then you’ll see it on their face and that. Yeah, like like that. Like right. They’ll get like that. And then the other is just like going OK and it’s just kind of like that. And it’s a weird thing. I look for all these. Use, but most importantly, I look for like the PSI in the giving in, and that’s like a weird thing. You can see it happen and it’s a cue that that I pick up on and I try to get to that. And when you do that and you can see the shoulders relax, you can hear the side and it’s like, all right, all right, fine. Right. When that happens and you’re like, done, let’s get this in contract offer execute. Right. That’s that’s kind of your cue. So I look for that. So get to that.
Another thing I’ll say is when you put an offer in and you don’t get the offer. Don’t give up. When we see how many times these homes come back on the market. Right. People when they’re in a multiple offer situation or typically making, you know, very quick decisions and not thinking it through and things can happen, OK, so don’t give up. Keep that communication open with the with the listing agent and keep in touch with them because top of mind, I think matters. So if it does go back on the market, they’re going to remember you and they’re going to call you and say, hey, I think this this deal is getting a little shaky. Are your clients still interested? So make sure that you don’t give up on that.
Well, let’s talk about the backup offer that because just because you weren’t the first one chosen right. Then you need to have that additional discussion with your clients. Hey, this is super competitive price point. We are likely to go into this. And if you’re willing to try multiple homes and keep going through the same thing, then it’s almost worth because we were looking at a number. Was it like I think it was 33% of the time a deal falls out when when it’s in multiple, often the first person to accept it.
I don’t know what the percentage is now, but I would be you know, I would say with us still being in a very active market, that it’s probably higher.
And then we put the pressure as a backup offer right on the primary offer. What that does is it makes the seller emboldened. Right. And all of a sudden the sellers like I’m not doing that. It makes it seem like there’s the grass is greener on the other side with this other backup offers are super powerful.
I think you can slide you in because they’re not really paying attention to that. They’re like, OK, fine, I’ll have the backup offer. But there they’re pretty confident in the beginning that this the primary offers are going to go through or they wouldn’t have taken it. So that’s a way for you to get in there and get your offer accepted. But I don’t want to drift off on the on the back offers I want to talk about. So now we’ve kind of prepared your client for what to expect and multiple offers. And then now we need to prepare the offer. So, you know, I’m going to tell you, when I see offers come over, all these things are important.
I’ve completed a fully completed contract correctly. Correctly. You know, if you’re in multiple offers and this is super important for your client, call one of us and call a buddy and have them look over it and see what they would think.
Ok, so fill it out properly. Have your client do a heartfelt letter to the seller. OK, we hear this all the time. I think sellers, I’ve seen them, they accept these offers, you know, maybe even less than what another offer could be because of, you know, the letter that the client has written to the seller. Now, when you write these letters, don’t make it a generic dear seller. Make it like it is coming straight from the buyer to the seller. Address them by name. Talk about specifics in the home. And I’ve seen that , you know, because a lot of people are writing letters these days, but that will separate you out from the others. When you talk about how I can see my, you know, my son playing in this backyard on a corner lot, you know, just something specific or I love how you sell or, you know, I’m going to decorate the living room just like you did, because I love how you did this. And they’re like, oh, you know, it just it really. I mean, it really connects with the seller when you do that, so make them do a letter and make it specific.
Ok, you know, to me it seems like when these offers come in, it’s difficult from a seller’s perspective on which one do I choose. I put these offers out and you lay them out on the table. And to be honest with you, most of the offers you can sell off some off. Right. But then once you select these ones here, they’re all like squinter bull, as I would call it, like if you like, squint your eyes a little bit. They’re all the same. One might have a slightly closer time frame. One might have, you know, a little bit more like there’s all these things. But honestly, they’re super, super similar. And how do I pick which one? Right. Because I don’t know the person. This is like John Smith, Mary, whatever. Right. And you’re just like, who are these people? Yeah, that doesn’t mean anything to me. The lenders don’t mean anything. Who’s the agent? I don’t know which one. And now they’re all the same. And I think there’s a huge opportunity there to make the difference. Right. In which one of my pickings and that’s where you matter as the agent, right. To make sure that you’ve done all the right things on the other side to make sure that agent can say, you know, I’ve actually done deals with China before in the past, and she’s done a great job. And so getting this deal today for your client is more it additionally is about what happened last week, about last month, last year, about those relationships that we’ve been building. And that’s where the name and the brand start to have some importance. So what you’re doing out there today affects your future buyers and multiple offers.
Are you creating a name for yourself and, you know, just make sure you see it through and you have proper communication, you know, like you said, and good relationships. The other thing is your lender. It is so important to include your lender on all these negotiations when they send the offer in and have that lender on the email and also have them make a phone call to that agent because that matters. Hey, we work together. We love to show that, you know, we have each other’s back. We’re a complete team and we’re all willing to work with with that person and make it easy for that agent. Right. So that is equally as important as that letter, in my opinion. And, you know, we just had this multiple offer, and I don’t know, I have to confirm, but I don’t know that one lender reached out that I that I’m aware of. And, boy, it makes a difference if you have ten offers that you’re trying to choose from. How do you know they’re really secure? You know, how do you know that you want to make sure that you have that discussion with the lender and you identify some key things, such as, you know, the lender tells them, hey, they are good to go, I’ve got their back. There is no problems at all. We can actually close early. Right.
So have that relationship with your lender and make one that you like, local lenders. I like local lenders. And we’ve been hearing more and more that people bank with chase or the bank with the big bank, and that’s fine. But there’s so many layers.
But I’m flat. No chase or they’ll come up with something like that.
Yeah, and that’s fine, you know, with that. But in the same regard, I would because it is looked upon in the industry as being, you know, a little bit more complicated, because if they take longer, they have so many layers of approvals that they have to go through and it’ll leave this desk and go here and they may see it in a totally different way. So think about it goes through that several times. It could get kicked out at last minute and then you’re stuck. So tell them to have a backup and say, hey, we have a lender, we have lenders. If you would like a second, would you want a.
A second opinion, a local sometimes just to see and make sure you’re getting the best terms and right. This is this is a big deal. So, you know, I think that is really important to do as well. So filling this out properly, I talk about that. Yes. You have to fill it out properly. Some things you can do in the contract is you can raise your earnest money. You can reduce the amount of contingencies in the not publishing.
All right, so, yeah, so you want to reduce the amount of contingencies in your contract and to show the strength of your buyer so earnest money is very high earners. Money amount would show good faith on the on from the buyer’s standpoint. And when you put in your three A, B and C, your cash down and how much you’re financing, I strongly suggest that if someone is going above list price in their offer that they put that additional amount down in three A and B, because essentially that’s the same thing is doing an appraisal waver, but it’s showing it up front. It’s showing, hey, I’m backing this by putting this money down right now, you know, or showing it in the contract. And you’ll also most likely need to do that appraisal waiver. But it’s just you’ve got it in two different places. And you can reiterate that, you know, to the selling agent your option fee.
I would totally do a very high option fee and have a discussion with your client, depending on the age of the home that you as the seller or you as the the buyer are going to have to do an inspection. And, you know, if the home is old, you’re not buying a brand-new home. So just be willing to know that these things up front. Ask the mechanical how old each one of them are, your AC, your water heater, things like that. And then you use that in your you know, when you put your option fee down.
So if they have a new HVAC and a new water heater and no foundation repairs done, ever go with a higher option fee and know that maybe, you know, you know, the risk is is reduced there and it just shows to a seller that, hey, these people are serious and the likelihood of them backing out, they’re going to they’re going to risk, you know, five hundred dollars or seven hundred dollars. That goes a long way, I think, with the seller. Don’t put in a home warranty.
Have the buyer pay your title policy. You know, those are things that, you know, just less cost to the seller and less contingencies the better. So, you know, you’re going to have to have these discussions with your clients so they know what the impact that has on them as far as money they’re going to have to bring to the table.
But with a great lending partner, I think there’s things that you can do to minimize those costs for your client. So working as a team would really be helpful there. So it’s important.
I got two quick points on them as well. Yeah. The first one is when you submit that offer over to the other agent to make it clear easy in one nice email, not like sending over six emails. Right. You have to understand from their perspective, they’re getting a lot of these different things. Yeah. A nice, clear subject, a well-written email, everything in it. Bullet’s like a summary. Super, super easy for them to understand and realize people don’t really want to read. And as nice as you kind of made that want to go through 20 contracts, you have to make them want to pick that one as well. Write it out. So like here, hit them with some good facts. Hit it, make it look beautiful. Yes. And I think that actually goes a long way as well. And then listen, as an agent, ask a couple of questions, listen to what they’re looking for. Do they need this? Do they want this? Do they want to lease back to whatever those things are, listen, understand and then deliver?
And I think that goes a long ways to having a conversation again with the agent. Just, hey, we want my client love. They love this home. We’re going to put an offer in what’s ideal for your client. Do they need the lease back? You know, what do they need? And then, you know, form your offer accordingly. But, yeah, you’re right, having that discussion and and putting together a clean email and we have templates for this. If you guys are interested to kind of see what what others are doing, we typically will do a summary and say sales price amount down and highlight something if it’s really important, like appraisal waiver. We don’t care where we’re paying. You know, we’re paying for this house no matter what, whatever it may be. Just put it in a quick summary, because I can tell you from our standpoint, from being on that listing side, when I see that, I’m going to be like, oh, I’m going to pull that one aside. This is strong, you know. But if somebody sends you here’s the offer I here’s the approval letter. Oh, I forgot the seller’s disclosure. And you’re getting all these different emails. It’s just like a lot. So make it easy on the other side as well.