With the real estate market more competitive than ever before, more and more agents are finding themselves in bidding wars as it gets more challenging for buyers to compete in such a strong seller’s market. Three top Houston agents shared some tips and tricks with Houston Agent magazine on how they help their clients win the home of their dreams.
Define “winning” for each client
Understanding your client’s goals is key to securing a deal, according to Ed Wolff from Beth Wolff Realtors Real Living. He recommends working with the buyer based on their goals and identifying precisely what they’re looking for, including how long they plan on living in the home. If they will be living there for a decade or longer, there’s more latitude in increasing the offer price.
“You can ‘win’ a bidding war by grossly overpaying for something that’s not worth it and that creates a totally different problem,” said Wolff. “You want to counsel your buyer upfront about where the potential benefit of owning the new home in question outweighs the value of the home.”
Go in with your strongest offer upfront
“A multiple offer situation is not the time to haggle over price and terms. We need to make our very strongest offer upfront and put our best foot forward if we really want the home,” said Morad Fiki from Fiki Properties.
According to Christine Langston, an agent with RE/MAX Legends and a member of The Matthews Team, cash offers always stand out, and clients who offer cash have a leg up. It also helps them compete with the flocks of new residents coming in from other parts of the country who often have cash offers in hand.
Ask the right questions
Fiki helps ensure that his clients ask all the right questions on the way to the closing table. When bidding for a potential home, buyers need to know the answers to questions about price tags, how fast clients can close, how short of an option period is required, whether an option period is even necessary and if paying cash is an option.
Secure financial backing
Fiki recommends obtaining a solid preapproval letter or a financial bank statement showing clients have the resources and capacity to close the transaction.
Increase option fee
Both Langston and Wolff recommend increasing the option fee to help strengthen their clients’ offers.
Decrease option period
Sometimes, shortening the option period can help sway things in a buyer’s favor, according to both Fiki and Langston. Fiki said an option period might not even be necessary sometimes, while Langston highly recommends against skipping the option period. In the end, it depends on the home.
Pay the title policy
The title policy is typically a seller’s charge, so sometimes Langston recommends buyers to opt to pay for the policy and help strengthen their offer.
Don’t skip the big stuff
Ed Wolff says skipping inspections or option periods is enormously risky and never recommends his clients to do this. Langston also recommends against clients skipping option periods because she believes it sets her clients up for disaster.
Add a personal touch
Writing a letter about why their clients want the home of their dreams helps appeal to the seller’s emotional side. Wolff said if a letter is genuine and earnest enough, it can add a lot of value to the offer. He recently oversaw a transaction where the buyer and seller bonded over going to Louisiana State University. The potential buyers mentioned this in their letter of intent to buy the house, and it ended up helping Wolff’s clients beat out other bids for the home.
Langston recently had a buyer write a “precious letter” about why she loves the home she’s bidding on so much, and the agent believes it’ll help strengthen her client’s offer.
Because it’s a seller’s market, the buyer needs to be flexible, said Langston. Sometimes that means being flexible with the seller’s terms and conditions or making sacrifices like forgoing home warranties or not asking the seller to do repairs.
Although contracts have traditionally been written to be more buyer-sided, the tables are turning. It feels unnatural to be so seller-sided in these contracts, and Langston believes it’s essential to convey this to the buyer.
Trust the process
Wolff said one of the biggest conversations he has with his clients is about “what is meant to be will be.” It can take time to find the right house, especially in this competitive market. Even if a client does lose out on an opportunity, another one might come along that is better suited for them.
Wolff recently had a buyer who was contracted for a house but became disappointed with how the transaction was going and terminated the contract. The home sold very rapidly to someone else, and Wolff’s client became remorseful about terminating the contract. Wolff explained the “what is meant to be will be” concept to them as they looked at other options and began to build from the ground up. It turns out that the other person terminated their contract, so Wolff’s client was able to go back and buy the house at a value with which they were more comfortable.
“This was consistent with what we know: the right thing is going to happen for you, but it’s about getting to that point,” said Wolff.
Be there for the buyers
In such a strong seller’s market, homebuyers are understandably becoming frustrated as they search for their future homes. Langston said she often tries to act like a therapist to her clients because they need to vent and take time to be sad and disappointed if they lose an offer. She also makes sure to educate buyers and keep them updated on the market.
“Keep sight that this is an emotional purchase for buyers. It’s not just a transaction and it’s so much more than just a sale; it’s people’s lives,” Langston said.