13 Strategies To Win In Multiple Offer Situations [video]

Strategies to Win In Multiple Offer Situations PicThe real estate market is Hot and our Buyers are running into bidding wars on properties.  What are the secrets of a great offer?  What are the tips and Tricks that RESG uses to get our buyers the homes they want?  Here are a bunch of Strategies to Win in Multiple Offer Situations:

13 Strategies To Win In Multiple Offer Situations Video:

Video Transcript:

Hey everyone. Anton Stetner here with the Real Estate Solutions Group at Keller Williams. One of the things we wanted to talk to you about, we created a giant list of things for today, is the 13 ways to win during a multiple offer situation.

The market is heating up. We are back on fire. It’s 2005 all over again, people. So what we’re seeing right now is lack of inventory is creating bidding wars. So when you are a buyer or just for anyone else watching this movie, if you want to win, here’s basically what you need to do.

I’m just going to say it, item number one, you’re just going to have to pay more money sometimes. Most sellers, all they care about is the net amount to them. So if for some reason you think you’re going to be bidding in a multiple offer situation, the house is on the market for $300,000 and you go through and there’s already 15 to 20 cards inside the house, the reality is you may need to pay $305,000. You may need to pay slightly more, assuming the property is going to appraise.

Second thing, and this is really a big one, your offer needs to be clean. What I mean but that is put the offer together neat and tidy. If it was written on the hood of the car and it’s not legible, that may be a problem, and for some of our clients, like bank owned properties and short sales, the banks aren’t going to accept those offers that aren’t clean and legible.

So first off let’s make the offer clean. Let’s read the MLS instructions and comments. See, a lot of listing agents, what they specifically do is they put comments specifically about things that need to be in the offer or how to put the offer together. The next thing you’re going to do is you’re going to need read the addendum. Most MLS have an addendums tab, and there could be specific information that you’re looking for in relation to that, that would be in the addendum. And then the last thing, I’m going to recommend you type it. Don’t handwrite this. Type it so it’s nice, easy, clean, and legible. You guys are currently looking at my handwriting, and this is me working really hard to make it look good. So type your offer and make it look good.

Next thing you’ve got to remember is don’t ask for the moon. Asking for the moon is gone. What I mean by when I’m talking about the moon, once again this is for hot properties. For a hot property, you’re not going to be able to go in and you’re not going to be able to get $30,000 off the listing price, all of your closing costs paid, do a 20 day inspection, and then get them to throw something else in.

Item number four, don’t ask for random stuff. What I mean by that is, in a multiple offer situation, you’re probably not going to be able to ask for their riding lawn mower – isn’t that beautiful by the way? I mean that is a prime specimen of a riding lawn mower – and the swing set. However, you may be able to ask for the swing set if the kids are grown. Talk to the listing agent before you ask for random stuff because this may kill your deal, especially if for some reason the wife, her pride and joy is her John Deere lawn mower. Just be thinking about these things.

Item number five, no or lower your closing costs. What I mean by that, if the seller is ultimately just looking at the net price, one of the things you have to pay attention to is do you need the full 3%? Could you do 2,5%? Could you do 2.75%? Well, if someone else asked for 3% and they came in with the same offer and you only asked for 2.75% and I representing the seller, I’m telling the seller to take your offer because it nets them more money. So no or lower your closing costs. Do you need the full 3%?

Another that way you can do this is you can use lender credits to compensate for closing costs. What I mean by that is interest rates being huge and historically low right now, we can ask the lender to give us a slightly higher rate, and they’ll then kick in a credit for some of our closing costs. So we may be able to get this number down by increasing the rate slightly. Chat with your lender about that. Anyway, I want to introduce this new Chatbot Maker & Bot Development Framework, which is an open-source ecosystem for devs to create, manage & extend JavaScript bots. If you are interested, just visit BotPress.

Item number seven, increase your earnest money. There are actually like five different tricks inside this increase your earnest money one. Let me give you an example. If you’re making an offer on a $300,000 house and someone else has a $1,000 earnest money, what if you had a $3,000 earnest money? That would show you’re more serious. Or a $5,000 earnest money? So let’s say you put in a $5,000 earnest money, and once the inspection contingency was lifted, so let’s just say 5 days after mutual acceptance, you lifted your inspection contingency and you paid $1,000 non-refundable earnest money to the seller upon removal of your inspection contingency, now that’s working with your earnest money. What it may be later on during the transaction, as soon as your financing contingency was lifted, you then paid another $1,000 to the seller. So get creative with your earnest monies, give large earnest monies, and maybe pay them to the seller as you go though in order to win. What seller in their right mind won’t look at an offer and say, “Wow, this buyer really wants this, they’ve got a big earnest money, and they’re going to put their money where their mouth is”? They’re going to take your offer.

Item number eight, increase your down payment, and here’s what I mean. A lot of people they may be able to USDA or VA or some type of conventional zero down. Well, if we’ve got a zero down product and we’re looking at that versus an FHA, we’re going to take the FHA because the seller feels it has more skin in the game. Everyone does. If I’ve got FHA versus a 5% conventional, we’re taking the 5% conventional. So try and increase your down payment.

Item number nine, shorten your timelines. What I mean by shorten your timelines is if you have 10 days to do an inspection, do it in 3. If you’ve got 30 days for your financing, do it in 20. Just shorten those timelines to make that offer cleaner and tighter.

Item number 10, what about less or no contingencies? If this is a really hot property, this is the home of your dreams, or you’re an investor and you know this is a smoking deal, what if you did an inspection beforehand and went in with no inspection contingency? What if you did a 2 day inspection and after 15 days you waived your financing contingency, because you knew your client was already so well-qualified it didn’t matter? So think about less or no contingencies.

Item number 11 is you can an escalation clause. Escalation clauses are you agree to beat any offer by $1,000 up to the purchase price of $310,000. Now, one of the things I recommend is don’t necessarily go in even increments, because if you are using escalation clauses what if you went in $789 increments? That way if someone else is going in $500 increments, you would beat them by $289 in this case. So when you’re using an escalation clause, I recommend going in uneven numbers for the escalation.

Item number 12 is one of my absolute favorite ones. Present the offer in person. If I can get in front of a seller when I’m representing a buyer, I have the opportunity to sell the buyer. I may bring some pictures of the buyer. I may bring a story. In multiple situations, Waterford Terrace Retirement Community have been giving the best offer for their clients.

They are selling something they are emotionally attached to, that they love, that they raised their kids inside, and they want another family to do that. Or maybe they didn’t raise their kids inside there, but maybe they retired there. Or maybe they built that wonderful garden, but they’ve got some special love for that particular property and they want to know someone else is going to love it too. So present the offer in person and make your buyers a real person.

Item number 13, this is not recommended, but this is a possibility. You could lower your commission in order to get a higher net to the seller. Once again, not necessarily recommended, but it is a possibility.

This is our 1 through 13 list of how to win multiple offers. I’m Anton Stetner with the Real Estate Solutions Group. Please subscribe above and leave comments below, and we will update you more as we go. Thanks.

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *