The Austin and San Antonio chapters of Platinum Top 50 — which each year “recognizes 50 residential Realtors for their outstanding achievements in sales, education, industry participation and civic leadership” — met recently and shared a wealth of business tips that can help you grow your business. Whether it’s dealing with low appraisals, unique marketing strategies or ways to grow your production, these agents know what works.
Below you’ll find some of the Platinum Top 50’s best tips for navigating today’s competitive market:
1. How do you handle overpriced listings?
Doing an independent “pre-listing” appraisal is an excellent way to help sellers be more realistic about their prices. If the sellers still insist on overpricing their listing, obtain a commitment from them to regularly reduce the price if their property doesn’t sell within a specific time period. A third approach is to seek feedback from other agents who either see the home on the property tour or who show the property.
As one agent put it, “I’d rather that they were unhappy with me now rather than later.”
2. You’re representing a buyer in a multiple-offer situation. How do you make your offer stand out?
First, avoid waiving the loan or inspection contingencies. A better approach is to have your buyers do their physical inspection prior to submitting an offer.
A different suggestion was to seek a conditional loan approval rather than just a preapproval. A conditional approval means that the buyer is qualified to buy a property up to a set price point, contingent upon the appraisal and the title work.
Other suggestions included raising the deposit/option fee; allowing the seller a lease-back after the property closes, if necessary; writing a letter to the sellers describing your buyers and why they love the property; and shortening the contingency periods.
Since buyers often have to concede so much on multiple offers to obtain the property, it’s common for them to be highly demanding in terms of what they ask for on the physical inspection. To take advantage of this situation and to stand out from the competition, have your buyers offer to pay for the first $1,000 of repairs cited on the physical inspection report.
When there is a multiple-offer situation, especially when the bidding has been fierce, there’s a high probability that the appraisal will come in low. You can make your offer stand out by having your buyer pay the difference between the appraised value and the purchase price in cash, provided that you take these two key steps:
First, make sure that your buyer has sufficient funds to cover this expense. Second, place a cap on the dollar amount that the buyer is willing to pay. This ensures that the contract is legal and protects your buyer if the gap between the price and the appraised value is too large.
3. How do you handle low appraisals?
When there is a low appraisal on a property the deal often falls apart. Here are some viable options for keeping your deal together:
The best defense is a good offense. If you are the listing agent, immediately remove the lockbox so that the appraiser cannot view the property without speaking to you. If you represent the buyer, ask the listing agent to remove the lockbox.
Before allowing the appraiser access, question him or her thoroughly. Offer to supply comparable sales that the appraiser may have missed.
Also, be sure to explore where the appraiser is from as well as when the appraiser last appraised a property in this area. If you discover the appraiser doesn’t really know the area, contact the lender immediately and ask for an appraiser who does know it.
If you receive a low appraisal, ask the lender if it is willing to accept a second appraisal. Who pays for the appraisal is negotiable.
Next, read every word on the appraisal carefully. Did the appraiser include the right schools for the area? Was the property measured properly? Did the appraiser fail to account for significant upgrades to the property, for the view, or for some other important factor?
One agent described how he worked with an “appraisal buddy” who helped him get certain appraisals thrown out by the lender, not because of the price, but due to the appraiser’s incompetence or lack of knowledge about the area.
If you find yourself in any of these situations, take a tip from these top performers. Chances are you’ll be glad you did.
Bernice Ross, CEO of RealEstateCoach.com, is a national speaker, trainer and author of the National Association of Realtors’ No. 1 best-seller, “Real Estate Dough: Your Recipe for Real Estate Success.” Hear Bernice’s five-minute daily real estate show, just named “new and notable” by iTunes, at www.RealEstateCoachRadio.com.