Guiding Your Sellers Through A Bidding War

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Real Estate

The best news that your listing clients can get is the real estate market being hot, for obvious reasons. They, and like all sellers, dream of getting multiple offers on their home. However, bidding-wars can be quite the opposite of fun, with the process becoming dizzy and wearing you out.

 Here are some tips to guide your sellers to success.

 

Do your market research!

Know the competition

 

You must research home sales in the local market and develop a thorough CMA, competitive market analysis. Are homes selling within a few days of listing? What are the closing prices? Are sellers getting at or above or below the asking price? The information found will help you take your next steps confidently. Knowledge has that effect on people!

 

Start on the right price footing!

Nail this critical step

 

Setting the list price of a home incorrectly at the start can be a doozy. Start too high, and it may trigger low-ball offers. Price too low, and you’ll get a quick sale, but with the nagging feeling that your client lost money. Listing the price slightly below the average price can result in multiple offers and peace of mind for both you and your sellers.

 

Don't forget the basics!

Set time aside

 

Having an MLS listing and a sign in the yard does not guarantee a sale, especially a top-dollar sale. The home must be in good repair, cleaned and staged, and well-marketed to persuade real interest. I would say that professional photos are absolutely essential, on top and having a targeted marketing plan to increase reach and engagement for the listing.

 Yes, creating a targeted marketing plan and getting professional photos taken may take some extra time, but it may SAVE time by helping the home sell more quickly, attracting interested buyers.

 

Choose the best time to go live!

Find optimal moment

 

What day do you think is the best to go live with a listing? If you believe that listing a home on any day will give you the same result, you are "seriously disturbed" - Elle Woods.

 

In fact, there is a day that has the best chance of attracting multiple offers, and that is a Thursday. Why? Because most buyer agents schedule showings on Thursdays or Fridays for the weekend, being that buyers prefer walk-throughs being on weekends.

Also, it creates momentum for a big open house on the following Saturday. Lastly, studies have shown that homes listed on a Thursday usually sell for more money.

 

Kindness goes a long way!

Fair, ethical, courteous

 

You want to be fair and ethical in your approach to multiple offers.

Always be courteous to the agent on the other side of the transaction while keeping your fiduciary responsibility to your client top-of-mind. Make sure not to divulge any confidential information on the motivation for selling to the buyers’ agent. Lastly, all parties appreciate it if you set a firm time and date for the highest and best offer.

 

What happens if the home doesn’t appraise well?

Two choices

 

The buyer is left with two choices in this scenario:

-Come up with more money out of pocket
-Hope that the seller lowers the price
 

In other words, it's better if the appraisal does go well... but that isn't always the case. Multiple offers are great, but the sky is not the limit. The lender’s appraisal could bring your seller back down to earth.

 

 

How to select the best offer

It's not always "highest bidder wins"

 

Conventional wisdom might suggest that the buyer who throws the most money at the seller will snag the house. The quality of the buyers is crucial. When selecting among offers, the buyers need to have their money in order: a preapproved loan and a healthy down payment make mortgage processing smoother.

 

Another area to consider: contingencies

Contingencies in a hot market

 

In a bidding war, buyers are advised to make their absolute best offers. From the seller’s perspective, that means few, if any, contingencies.

 Even though contingencies affect almost every real estate transaction, while in a hot market, it can be rejected by the seller.

 

When all is said and done, the best offer is the one that balances the best price, minimal contingencies and the probability of a problem-free closing.

 

May the best buyer win.