In hot real estate markets like San Francisco, buyers need to know that their offer won’t be alone. And that’s where a good real estate agent comes in — to help make that offer standout and educate that buyer on what they need to do to be competitive.
For Jeannie Gant broker and partner at Dot Real Estate in San Francisco, there are a couple of things she likes to do. First, she creates a relationship with the listing agent, she told the crowd at Inman Connect in Las Vegas.
“If you don’t know the listing agent, find someone who does, someone in your office who can vouch for you,” Gant said.
Knowing the listing agent well can give you an advantage in asking that agent how many offers they received for a certain property. Then you know, even if your client missed out, exactly how many other buyers missed out and what they offered, so you have a sense of your competition for the next property.
Gant also likes to find out what the seller’s motivation is to learn exactly what they can do to make the offer competitive and enticing.
Sometimes it’s difficult for clients to wrap their heads around coming in way above asking price, but preparing them is important.
Jodi Halldorson, broker associate and assistant brokerage manager at Park North Real Estate in San Francisco said it’s important that the client understands that it’s not the agent wanting you to offer one number, it’s what the stats are telling the client they need to offer.
“The easiest way to have a client understand the process is to show comps,” Halldorson said. “In this market, we’re used to seeing things go over asking price. Across the country that may not be the case. But hard numbers are not going to lie.”
Kevin Birmingham, the broker of Park North Real Estate in San Francisco, has a bit of a different tactic for clients: Let them fail.
“It’s called training your buyers, and it’s basically letting them fall flat,” Birmingham said. “You can explain, you can show them the comps … you can do all of that, and they understand, but when it comes time, they see it priced at $995,000 for a home that’s going to sell for $1.4 million, it’s hard for them to come up $400,000. So let them write what they’re going to write.”
Birmingham said it’s things as simple as telling them they should use a reputable lender versus some lender they found online or that they should write a love letter telling the seller who they are.
“You tell them all these things, and they don’t think it’s that important, and then you let come in seventh out of 10 offers, and they kind of get an idea,” Birmingham said.
The other thing he always tells sellers in a competitive market is: “Do not fall in love.”
“You’re going to find something, and they’re going to say, ‘this is the perfect house,’ and even if they come in and write a really good offer, you’re just going to lose out to someone who is all-cash or someone that is willing to go $150,000 above any justified comp,” Birmingham said. “So you really have to have people prepared.”