Editor’s note: Tara-Nicholle Nelson will lead a free webinar from 10 a.m. to 11 a.m PDT (1 p.m. to 2 p.m. EDT) on Thursday, Oct. 8: "Three Low-Cost Ways to Make More Money by Connecting with Women Real Estate Consumers." Women make or influence an estimated 91 percent of real estate decisions, and they think about, shop for and buy homes differently than men. Click here to register and find out more about real estate’s gender factor.
Q: I have been making offers for a couple of months now. In my town, most low-priced listings get lots of offers. In fact, every home I’ve made an offer on, I’ve been up against at least a couple of other buyers. Sometimes, the seller will say there’s no offer before we make ours, but then we’ll send it over and they’ll call back and say that they heard another offer is coming in the next day, and again the next day, so that they may wait a week before they give us an answer. Why are they taking so long to get back to us?
A: Traditionally, the preventive for your problem was simply to set a short offer expiration time frame and essentially force the seller to either respond to your offer, forgoing other potential offers that might come in, or forgo your offer on the wish/prayer that others will come in and be better than yours.
These days, many listing agents and sellers simply disregard or repeatedly request extensions of short time frames, assuming (correctly) that most buyers are not going to be disinterested in a property because the seller takes a few days longer to respond to their offer.
(Note to sellers: This is not always a valid assumption. Relocating buyers who must pin down a property during a brief visit to the area, for instance, might move on immediately if they don’t get a firm acceptance.)
Waiting and waiting for the seller to give you an answer is about as fun as waiting for paper cuts to heal. I get that. Understand, though, that the property at issue is very likely the seller’s largest financial asset. Also understand that in a multiple-offer market, it has been shown repeatedly that allowing interested buyers several days — and at least one weekend — during which they can view the property is one of the best ways to ensure that the property was fully exposed to the market prior to an offer being accepted.
In other words, sellers stall to make sure they are getting the best price for their home — not just the first price. As irritating as this might be from your perspective, the tables will be turned one day. You’ll be in the seller’s shoes. And you’ll do everything you can to achieve your own goals for the sale, one of which might very well be getting top dollar for your home.
So can you really blame the seller?
You can, if you’d like, but it’d be a waste of energy. Instead, flip your mindset on this and decide that you want to learn the rules of this game, meaning the strategies you can use to be the victorious buyer even if the seller holds onto your offer for a while in order to collect additional offers. That’s a much better use of your time.
In my neck of the woods, seller stalls come in two flavors. Some sellers list the home, announcing at the time of the listing that they’ll be taking offers on "X" date sometime out in the future. Other, perhaps less confident, sellers list the property, agree to take offers "as they come," then stall once they have you on the line if they even hear a whiff of interest from another buyer — in hopes that their fondest bidding-war dreams will come true. …CONTINUED
If the place is listed with a notation that offers won’t be taken until "X" date, make sure your agent stays in contact with the listing agent up until that date. You’ll want to keep track of how many confirmed offers are coming in so you can decide whether to participate and, if so, how much to offer.
It’s also important to stay in close contact with the listing agent because on occasion the seller might consider or take a pre-emptive offer prior to the set offer date; you don’t want to wait patiently until offer day and find out that — "Surprise!" — the place has already been sold.
Also, if you know that you’re going to be up against multiple offers, even if the others haven’t come in yet at the time you make yours, it behooves you to act like they’re already in when you make your offer. That may mean offering more than the asking price on a home where you are the only offer at the time. I know, it’s excruciating, but you’ll be glad you did.
I recently had some buyer clients make an offer on a place where they were the only offer, even though the seller promised to get an answer back to us within a couple of hours. We made an above-asking offer similar to what we would have presented if there were other offers. The sellers called back two hours later and accepted our offer — only after mentioning that two additional offers had come in during that two hours and ours was still the top one.
Set yourself up for success by being strategic when you know the seller is stalling:
1. Make a pre-emptive offer, if the seller will look at it, but make sure it’s enticing enough to warrant the seller’s reversal of their stall tactics.
2. Offer more than asking — even if you’re the only offer. The seller will be more likely to accept it without stalling.
3. Get clear on the list-price-to-sale-price ratio of recent, similar listings so you can know what the place is likely to sell for and what price is justified. Then, make your personal highest/best offer up front.
4. If there’s an offer date set, and the seller doesn’t want to look at pre-emptive offers, don’t make your offer until the scheduled date and time. You want to have the most up-to-the-minute information about how many other offers there are before you make a final decision as to your offer price and terms.
5. Be aggressive with every element of your offer, every time (e.g., shorten your contingency periods as much as possible; sign off on advance disclosures in advance; submit proof of viable financing, etc.).
6. Don’t get your heart set on any property until you have a signed contract in hand!
Tara-Nicholle Nelson is author of "The Savvy Woman’s Homebuying Handbook" and "Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions." Ask her a real estate question online or visit her Web site, www.rethinkrealestate.com.
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