Whenever we ask agents what their most difficult negotiation is, we get a quick response: multiple offers! During my 25-year career with a Fortune 50 company, we used competitive bidding routinely to get much better results. And using a proven process was the key to our success.
A good process is like a GPS. It gives a recommended route, clear directions, and help along the way.
We designed our new Seller and Buyer Multiple Offers Guides to give agents a proven process that leads to better results. Both guides contain checklists, worksheets, summaries, scripts, and customizable forms for use with clients.
Checklists ensure important steps will not be missed. This is why pilots, surgeons, and other professionals use them. A concise offer worksheet can make the seller’s decision-making process easier. Summaries of what questions to ask to get information from others lead to better preparation and better outcomes.
From the seller’s side, knowing what information to share with buyers is critical to getting better results for your seller. When communicating the seller’s needs, the listing agent must be careful not to reveal confidential information or to limit buyers unnecessarily. For example, you could be specific about the earnest deposit, closing date, and acceptability of escalation clauses while giving general guidance on price, personal property, appraisal gap protection, or the buyer paying some of the seller’s closing costs.
Giving buyers good guidance increases the odds of getting what the seller wants—or more!
Having the right worksheet to compare all offers with the seller’s goals is greatly beneficial. If buyers include appraisal gap protection and paying some of the seller’s closing costs, different scenarios can lead to different outcomes. It is important to play these scenarios out so the seller can make an informed decision.
As a buyer’s agent, getting information from the listing agent is often a challenge. If a listing agent is tight-lipped, try the following approaches to get actionable information:
- Educate the listing agent on why it is in the seller’s self-interest to provide guidance
- Exchange information (buyer’s agent should go first so listing agent will feel obligated to reciprocate)
- Use Either/Or questions (“Does your seller want a shorter or longer closing date?”)
Another critical area is the presentation of the buyer’s offer. You want to stand out from the crowd in the most professional way! Having a short Zoom call with the listing agent or sending a short video of the highlights of the buyer’s offer is strongly recommended. After all, the buyer’s agent should be able to present the buyer’s offer better than the listing agent. A cover letter to the purchase contract should attempt to persuade using logic and facts to support the buyer’s offer.
In certain situations, an emotional appeal from the buyer or buyer’s agent may be appropriate. We all have a heart! I once had a buyer couple and the wife had lupus. The ideal home needed wide hallways and tile flooring for her wheelchair. I found the perfect home for them, but the listing agent already had an offer higher than my buyers could go. I asked the wife to write a letter from her heart about what this home meant to her. I then met with the listing agent to plead for my clients (emotional persuasion is best done in-person). My buyers got the house! And telling them was the most satisfying moment I have had in real estate.
One rule of thumb: buyers should offer anything and everything that might be of value to the seller and then let the seller decide. Sometimes what the buyer thinks is marginal or worthless turns out to be the decisive factor.
Multiple offers can lead to challenging situations. Having a GPS to guide you makes a lot of sense. With our new guides, you are certain to have many more successful trips!
The Real Estate Negotiation Institute (RENI) was founded in 2005 and is the leading negotiation training company in real estate in North America. RENI focuses on negotiation and persuasion skills for real estate professionals. For more information visit www.TheRENI.com.