Despite the uncertainty that comes with a global pandemic, as we all know, real estate markets across the nation have experienced unprecedented activity over the past year.
With inventory continuing to be limited in highly competitive markets, helping your client craft a strong offer is essential to compete in 2021. Whether it’s a first-time purchase or the fifth, I’ve shared three tips to help make your client’s offer stand out from the competition.
1. Show that your client is a serious buyer
First things first, aside from price, it’s essential to showcase to the sellers that your client is serious about purchasing their property. Be sure to have your clients go the extra step and get preapproved, which is a stronger option than being prequalified. A preapproval letter provides a strong indication that your clients are both ready and qualified to move forward with the purchase.
In addition to providing a preapproval letter from their lender, work with your clients to determine creative ways to make an offer even more competitive. Take a look at fees that can be split or covered by the buyer, or consider waiving other costs that might help sweeten the deal.
In situations where there are multiple offers on a home, making an effort and taking these extra steps — like being willing to split or cover some additional costs — can really help an offer stand out.
2. Shorten the timeline
Educate your client on what an “option period” is, and consider the length of time that might be realistic for their situation and this particular investment. Decreasing the length of the option period — while maintaining a realistic period to conduct the home inspection and do other due diligence still — is reassuring for a seller.
An offer that gives less time for clients to back out of the deal is much more favorable. It also shortens the period of time for closing, which is often beneficial for a seller who might be needing to close by a certain date. Ensuring your clients’ flexibility and ability to work with the seller’s timeline can help them give a leg up on the competition.
3. Limit the conditions of the deal
By limiting the contingencies to be met to execute the deal, your client’s offer will have a lower perceived risk than other offers. Because contingencies allow buyers to back out of a sale with no consequences, be sure to list ones that really matter to your client. Some contingencies that ask too much can be deal-breakers, especially when a seller is presented with multiple offers.
There’s one last thing to remember about sellers as they consider all the offers they receive on their property — they’re always looking to maximize price while determining the most qualified buyer.
The price is one of the biggest factors in getting your offer accepted in a competitive market, and your client should be prepared to put a maximum value on their offer from the get-go. For more tips on successfully navigating a red-hot seller’s market and multiple-offer situations, here are a few resources:
- Overwhelmed with multiple offers? Here’s how to handle them better
- Evaluating multiple offers? 15 questions sellers should ask
- 6 tips for crafting stronger buyer offers
- Losing bidding wars? 10 strategies for victory
- How to price a listing in a red-hot seller’s market
- In a red-hot seller’s market, is staging even worth it?
- Negotiating? 7 words to put on your ‘don’t say’ list