5 Strategies For a Multiple Offer Situation* - Your Full Service Agent Tips
Here are 5 unique strategies that you can use to get your real estate offer to stand out in a crowd of multiple offers!
If you have been in the business for a while, you know that in a multiple offer situation the highest offer is not always the best offer! Moreover, if you have had your real estate offer rejected in today’s 2021 market, you know that everyone is going above and beyond the list price to win. Watch a video here that explains the first 3 tips!
Now I’m not going to recommend to you what everyone else is also telling you. I’m not going to encourage you to use an escalation clause, I’m not going to encourage you to waive the appraisal, and I’m certainly not going to encourage you to waive your home inspection. Now, I’m not saying you cannot negotiate to waive those things, but I wanted to offer you 5 alternatives that you may not have thought about doing that could make a huge difference in getting your offer to the top of the pile.
1. Meet the Seller’s Needs Beyond Price
Find out what is most important to the seller BEYOND the price! Reach out to the listing agent to determine what the seller’s sticking points are for the other terms of the contract. It is very rare that the only thing that matters to the Seller is price.
For example, does the seller need more time in the home? Maybe closing as soon as possible is not their highest priority or maybe they need to lease back the home for a couple of months while they wait on their next home. Another need a seller may have is that they do not want to make any repairs (one of my biggest frustrations as a listing agent and Florida attorney is that buyers are making offers on the As-Is Contract and still ask for repairs).
Another concern is that they may want you to put more skin in the game with a higher Escrow Money Deposit. I can only guess what else the seller may need, but the listing agent should know! Find out what the seller wants, go get it and give it to them.
2. No More Buyer Love Letters!
Send a cover letter, not a buyer love letter! Like it or not, people have biases, both conscious and unconscious. As an agent and a buyer, you never want to mistakenly trigger a bias in the seller. Under both the Federal and State Fair Housing Act, we, as real estate professionals, have a duty to avoid discrimination against protected classes.
This is how a love letter can hurt the buyer: if they mention they have children, that’s a protected class! If they mention their religion, or how celebrating a religious holiday in this new home would be great, that’s a protected class. If they send a picture that discloses their race, color, sex, or disability, those are all protected classes as well.
But the truth of the matter is, none of that should matter. What should matter to a seller is your ability to purchase and close on the home. Sending a cover letter that explains your financial and creditworthiness, along with an explanation of the terms you are submitting, could be meaningful to the seller’s decision to accept your offer. In a multiple offer situation, let’s make it easier for the listing agent to receive, digest, and present your offer to the sellers.
3. Seller Closing Costs Credit
Next, if your financial situation allows, especially if you are financing, offer to pay a portion of the Seller's Closing Costs, instead of paying above appraisal value. This would contribute more money to the bottom line of the seller. When the price goes up so do all the costs of selling your home, including but not limited to commissions, title fees, insurance, and taxes. Whereas a cash contribution back to the seller is real money.
Our team would be happy to walk you through a seller net sheet for the offer price including a cash credit back to the seller versus that same dollar amount on top of the list price. The difference will speak for itself. The reality is that it costs the buyer the same total amount, but how we apply those funds, can have a huge impact on the seller’s net equity.
4. Offer a Closing Guarantee
Instead of waiving some very important terms that may ultimately save you lots of money, offer an incentive to the seller to accept your offer. For example, offer a non-refundable escrow deposit after the completion of the inspection period. In Florida, our contracts are written such that you can make two deposits due on two different dates. Consider offering the seller a 2nd deposit after certain contingencies are met, i.e. inspections, appraisal, or financing. This willingness to sacrifice your escrow deposit will display your commitment to seeing the purchase completed.
5. Use the Standard Florida FAR/BAR 5 or CRSP 16 Contract*
In Florida, there are 3 residential sales contracts: FAR/BAR As Is, FAR/BAR 5, and CRSP 16. The challenge with the As Is Contract is that while it does not contemplate repair negotiations, buyers still often submit repair requests, which have diluted its meaning and intention. While this is one of the most commonly used contracts in Florida, it does not outline terms to assist the seller and the buyer in their negotiation of repairs.
Instead, seek advice about submitting the offer on one of the other contracts and pre-negotiating the repairs needed ahead of time. Because the FAR/BAR 5 and CRSP 16 do not have an as-is inspection contingency, a seller may find them more attractive because there is no provision for the buyer to cancel the contract for any reason in his/her/their sole discretion prior to the expiration of the inspection period. For that reason, a buyer who is more committed to working with the seller through any repair negotiations and toward a successful closing may find benefit in submitting an offer on either of these other contracts.
If you found these tips valuable, please let me know in the comments below, and don’t hesitate to share our YouTube videos with your friends, family, and colleagues. If there is anything else we can do to help you accomplish your real estate goals, please send us a message. We are here to help!
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