April 1, 2017
10 ways to make your offer the winner in a multiple offer scenario
It’s no secret that the real estate market in Franklin has been hot these last few years – more-so than ever in Spring 2017 we are seeing multiple offer scenarios time after time on nice houses. I make sure I tell all my clients that there are more ways to lose than to win in a multiple offer scenario, but what if you could stack the deck in your favor and increase your chances of success?
The reality of the situation is that you can and I’ve put together a list of the 10 things you can do when faced with a multiple offer situation.
#10. Let’s start out simple – ALWAYS INCLUDE AN UP TO DATE APPROVAL LETTER with your offer.
Your lender will be more than happy to provide a letter for the EXACT amount of your offered price and specific to the property you are making an offer on. If there is more than one offer, those with an approval letter get far greater consideration than those without. It’s the easiest no-brainer thing you can do, so do it! Extra Credit: Conventional financing (this usually means you have a 20% down-payment) will always trump FHA or VA financing – there are many reasons why – call me and I’ll happily explain.
#9. Another basic concept – KEEP YOUR OFFER CLEAN.
Will the seller consider a sale contingency in a multiple offer scenario? Almost certainly not. Will they accept your offer with a contingency that your spouse has to fly in and approve the house next Wednesday? NO WAY! Similarly, unless the seller has already told you that they plan to leave those bar stools, the standalone wine fridge, the trampoline in the back yard (or anything else) then don’t include it in your offer, you’ll put your own offer at a disadvantage – are those <insert item of personal property you’re talking about> really worth losing the house over? I sincerely doubt it and if you end up being the accepted offer, it’s way easier to go back after the fact and ask the seller if they would consider leaving (or selling you) whatever items that you simply can’t live without.
#8. INCLUDE ALL SUPPORTING PAPERWORK WITH YOUR OFFER.
Buyer’s tend to get hung up on the Purchase and Sales Agreement but did you know that an offer requires substantial supporting documentation before it’s really complete? There’s a Confirmation of Agency Status, a Disclaimer Notice, the Seller’s Property Disclosure, a copy of your Earnest/Trust Money Check the Compensation Disbursement oh and I think I already mentioned, YOUR UP TO DATE APPROVAL LETTER at a minimum – the offer package I submitted last night was 25 pages long! Extra Credit: We live in a digital world, so more than likely your offer package will be in a pdf format but it is critically important that you merge all these documents into one file. Even more credit if you do it in the “right” order (yes I believe it makes a big difference) and even more credit if you name the file correctly (come on people, the difference is in the details!).
#7. SPLASH THE CASH WITH YOUR EARNEST/TRUST MONEY CHECK.
I often get push-back from my clients on this item and I think I know why. Client’s can (and do) get their money back under any one of a multitude of scenarios but they still harbor a Fear of Loss – the reality is that a client losing their Earnest/Trust Money is extremely rare and almost always due to some form of bad conduct on their part. Ask yourself this – how comfortable are you writing a check for $10? Of course, the answer is, “very” because you make $10 decisions every day. What about $1,000 decisions? Probably not so comfortable. Now how about a $25,000 check – how many of those decisions do you make? You get the picture, but now reverse the positions of the parties and imagine that only one of those multiple offers has a check for $25,000 Earnest money while others have $5,000. Just as you are not used to writing checks that size, the seller is not used to seeing them and now you have differentiated your offer in a positive way. This stuff isn’t rocket science!
#6. FIND OUT WHAT TERMS THE SELLER IS LOOKING FOR.
Again a no-brainer when you read this, but I can promise you this doesn’t happen more often than not! One of my first calls is always to the list agent to ask what the Seller’s dream offer would look like – of course we haven’t discussed price, but what about terms? It’s no coincidence when my client’s offer exactly matches the timeline the seller was hoping to achieve, or has a term that seems too good to be true (but I only put in there because the List Agent shared what was important to their client with me) all of which adds value to my client’s offer over all the others.
Mid Post Food For Thought
Patience will be rewarded! If your offer isn’t accepted, I personally don’t believe in asking for your offer to be held as a “second place” or “backup offer” (which means you really aren’t able to make offers elsewhere) but I do believe that in the event you lose, your agent TALKS (not text, email or use smoke signals) to the list agent. Learn whatever they can and make sure the list agent knows that if for any reason the integrity of their first deal goes South – you want them to call you FIRST. I sold a house in March 2017 using just this tactic – the agent even told me he came back to my client’s offer because of my personality (I jokingly told him when I submitted the offer, “not that it makes any difference to my client’s offer, but you should know that my family owns a brewery in Franklin!” silly jokes make my client’s offer stand out).
#5. HAVE YOUR AGENT INCLUDE A PERSONAL LETTER.
Again, my advice is very specific, have your agent write this letter NOT YOU. There are numerous psychological reasons behind this (which will be the subject of a separate post) but in essence, understand that when a seller has a choice of people to deal with, they will gravitate towards someone they feel good about having the house, someone they like. Help them like you! Every letter I write includes this language.
“As so often occurs in this marvelous technological age, the “black and white” information of an offer flows freely while the human and individual circumstances don’t accompany at all. Therefore I would like to take the chance to share a few of those with you.”
This ought to be so simple but gets overlooked time after time – my letter varies a lot depending on what we saw in the house and it is both general in nature but tailored to the SELLER (not the buyer). Easy example: the seller has photos, uniforms, flags etc. in their home – the seller is almost certainly a veteran. If your client is also a vet then make sure you make that clear in your letter, which branch of the military did they serve in, where and when?
While my client is wowing themselves with floor-plan, upgrades and their future dreams I’m looking for clues in a home – these are the details that make a difference. I have flat out been told by a list agent that my client’s offer was accepted in a multiple offer scenario even though it wasn’t the highest price PURELY on the basis of that letter. THIS STUFF WORKS!
#4. DON’T RUSH THE SELLER.
Understand that the Seller holds all the cards and act accordingly – don’t send in an offer with a 30 minute timeline for response – if you make the seller mad, your offer drops to the bottom of the pile (remember with multiple offers, the seller will only sell to someone they like). Again, if the list agent has told your agent that the seller will review all offers at a given time then respect that – make your deadline for response a few hours or the next morning after the review period ends.
My top 3 tips are proprietary – I reserve them for use with my clients, so that they are the ones writing offers with the winning edge. These 3 strategies alone overwhelmingly tip the odds in their favor in a multiple offer scenario.
Want proof? That 25 page offer package I submitted last night – it was accepted at 11.05am this morning. My client’s offer was ONE of SIX – and yes, it was the WINNING OFFER and even beat out an all cash offer.
The stereotypes of real estate agents are strong – consumers think we simply open doors and put pen to paper. You can see from the above that what’s in my head (is really not all that scary and) helps my clients achieve their goals with less drama and disappointment. Selling real estate is my business and I’m always ready to assist you with your Franklin Real estate needs – buying or selling I have over 16 years experience and a group of clients who consistently feel like I treated them as I would family. I can always be reached at 615 579-7909 via Facebook and of course Email.