9 ways to win a bidding war

Jack Renfree Leave a comment

It’s a seller’s world in today’s housing market, and buyers and their agents are getting creative trying to gain an advantage in the bidding wars that seem to precede any successful transaction. From pizza to pre-approvals, here are some of the tools real estate agents are using to help their clients land their dream homes. 

Payment in full. It may seem obvious, but now is not the time to nickel and dime. Sellers know they have plenty of options on the table, so coming in with an offer that’s over the asking price is a good way to get their attention, according to Keller Williams Realty River Cities agent Tiffiney Graham. 

“Of course, the house still has to appraise,” she said. “One of the things we’re doing to win a bid is we’re agreeing to pay a certain amount over appraisal price.” 

In a recent transaction, Graham’s client agreed to pay the seller $15,000 over the appraisal price. 

“No matter what, they’re going to get $15,000 extra,” she said. 

Move fast. Sellers want to get the deal done, and get it done today. There are many ways to grease the skids, according to those we spoke to.  

One of the biggest obstacles to closing a deal is financing, and with so much cash flooding the area from the West Coast and New York, sellers won’t wait on one buyer to secure a loan when there’s another one with money in their pocket.  

Joseph Crochet, founder of Crochet Realty Group and an agent at PalmerHouse Properties, told Atlanta Agent magazine a key for those who do need financing is to get preapproved for their loan vs. pre-qualified. Being preapproved for a mortgage is almost as good as having cash, because the seller knows you’ve got dry powder ready for deployment. 

Option money. Nicholas Brown, founder of &Brown and an agent at Compass, will often recommend his client put down “option money,” maybe $3,000 to $5,000 payable to the seller. 

“Why that is strong is it says, ‘I immediately want to be the winner, I’m going to tell you that if I don’t buy the house, you’re going to get this money, regardless,” Brown said.  

The buyer’s earnest money payment is not at risk, but the option money is immediately nonrefundable, Brown said. 

Keep it clean. A critical step buyers can take that was cited by all interviewees is a clean, no-hassle contract with no special conditions. 

“A really clean contract and a clean offer,” as Graham said. 

“You’re not really asking for anything: If the seller wants to take the fridge, if the seller wants to take the washer and dryer, then so be it, because someone behind you is going to be accepting of those seller terms,” Brown explained. 

Cover those closing costs. The days of negotiating who pays what closing costs are over, at least for now, agents agreed. 

“When it’s a buyer’s market, we usually ask for a certain dollar amount from the seller toward closing costs, and right now, that amount is zero,” Graham said. “A buyer’s got to be able to come up with their own money in order to close on top of any down payment that they have.” 

She added that buyers should expect to cover other additional costs, like inspections of the pool or septic system. 

Let them stay. Buyers need to be ready to provide the seller some additional time in the house post-sale. 

“A typical closing is 30 days, but sometimes a seller needs more time to find a house themselves,” Graham said.  

She recounted a recent transaction in which her buyer closed on a house but agreed to let the seller rent for 12 months while they built a house of their own.  

“That was a creative solution to being able to get the buyer the house that they wanted,” she said. “It’s beneficial for a seller to do something like that because right now, they’re getting the highest price they can for their home, but they’re allowed to stay in the home until they find or build something.” 

To waive or not to waive? There’s a lot of talk about buyers agreeing to waive home inspections before closing, and Graham has one piece of advice: Don’t do it.  

“I want to protect my buyers and give them the opportunity to have an inspection and be able to walk away if the house is in poor condition,” she said. “If that’s going to make us lose a contract, then so be it.” 

Instead, Crochet suggested a “right to request repairs,” which can also be used to trim down the due-diligence period, another fact of life for buyers these days. 

“Five days, max,” Crochet said of the due diligence periods he’s seeing.  

Brown has sometimes used the right to request repairs to eliminate the due-diligence period completely. 

“In Georgia, the due-diligence period means you can terminate for any reason,” he said. “If you take that off the table, and you go to right to repair, then the right to repair means you still get to do your inspection, you come back to the seller and say, ‘Here are the deficiencies, I’d like to negotiate these items out with you.’” 

Continuing education. Buyers need to know what to expect. In most cases, it’s been many years since a buyer last bought a house, if they’re not buying one for the first time. Getting them used to the new normal is key. 

Buyers need to be prepared to “go in full throttle, the best they can, right out the gate,” Crochet said. “We’re not going in with the idea to be the highest and best all the time, but especially in this market, I would say eight out of 10 times we tell them to make the highest and best offer that they can present.” 

Taking it personal. Keeping in close contact with the listing agent during negotiations, or “charming their butts off,” as Brown puts it, can also make the difference between success and failure. 

“I’ve seen contracts where people are offering to buy the sellers pizza,” he said. “It’s anything and everything right now. You’re deploying the charm offensive, you’re making sure that you acquiesce to everything that the seller needs as far as their dates, their timelines, their terms.” 

Even something as small as a letter from the buyer, noting their emotional attachment to the home, can move the needle, Crochet said. 

“Sellers appreciate that as well,” he said. “Each house has its own story, each house is going to be different.” 

For more on negotiations, see our course on making an offer for your client.

9 simple tips Realtors recommend to get top dollar for your listing

Liz Hughes Leave a comment

Selling a home in today’s market certainly isn’t as difficult as in years past, but agents still want to be sure their sellers are putting their best foot forward. From simple upgrades to easy tasks and repairs, we asked Realtors for their tips for getting the best offer for their sellers in this historic market. 

Taking a thorough walk through the home and the property before listing and noting what needs to be done is something Realtors we spoke with do each and every time. The first thing Barbara Alavi, an agent with William Raveis, does is go through the entire property and create a punch list of what needs to be done to get a home ready to sell. 

From making minor fixes to curb appeal issues and everything in between, here is what the experts we spoke with suggest for getting the most out of your listing. 

Exterior curb appeal: One of the first things potential buyers notice is the exterior curb appeal of the house. It’s their first impression of your property. Alavi suggests mulching the flower beds, cutting overgrown bushes and shrubs, seeding the lawn and even adding seasonal flowers or plant arrangements in planters or adding cute accent solar lights by the walkway.

Declutter: Clutter can be a major turnoff for potential buyers and can take away from all a home has to offer. From removing personal items to taking bulky things out and putting them in storage, decluttering is key before listing a home. 

Alavi says “less is best.” From clutter on kitchen counters, in the closets, in the cabinets or in the basement she says “get rid of it.” “I always say, ‘Pretend you are going into a furniture store when you go into a room that is staged,’” she said. “That is what you want your property to look like. Like no one lives there.”

Jill McTague, a Realtor with REMAX/Andrew Realty Services and Deb on the Web Realty Group, says you want the buyers to come in and want to live there. 

“I always say the number one thing is to have a clean house and I tell people you have to declutter,” she says. “Take the personal stuff away; rent a storage unit to take bigger items out. The goal is to make the room look bigger, and if you have a ton of furniture in it, it won’t work. The old expression ‘less is more’ is true. The less furniture in a room the better.”  

Make the most of outdoor areas: If you have a nice backyard, deck or patio, Alavi says stage it with outdoor furniture to make it inviting. “Get nice cushions and planters to make that space look really nice. Maybe add some accent lighting or string lighting to create a welcoming environment,” she said. 

McTague says you can have two houses right next door to each other that are identical, but if one is clean, decluttered and spruced up, it will sell for much higher than the one that isn’t. “People just get anxiety going through a house with too much stuff,” she said. 

It’s also important to make sure the exterior of the home is also decluttered. 

“The yard is a big deal, and it doesn’t take a big expense to rake and throw trash away,” McTague said. “Be sure to declutter the yard as well. If it’s something you want to put a little money in, that is one of the things you’ll see a return on.” If the yard isn’t in the best shape and it’s too big of an expense, McTague says stage it. “Even if the grass is terrible add a little seating area out there.”

A fresh coat of paint: Tracy Spaniol, Realtor with RE/MAX Encore says a fresh coat of paint is a must before listing. “It makes the home feel clean and new,” she said.

Alavi suggests always painting the ceilings and getting a neutral color on the wall. She also suggests removing wallpaper if necessary. 

Make basic repairs: Don’t forget to take stock of basic repairs from a ripped screen door to leaking faucets or an off-track closet door. “These are basic things people look at,” Alavi said. “I recommend if anything is peeling — a garage door, window trims, deck — sand or stain or paint them. It just looks bad and that’s what the buyers will see.” She also suggests fixing any loose roof tiles, cleaning the gutters and having some masonry work done if the home has any loose bricks or stonework. 

“If you have a new roof but had a leak previously and never fixed the ceiling, you want to paint that,” McTague said, adding that these minor repairs are important because it’s the small things like a loose railing, loose floorboard, chipped paint that make people think the house hasn’t been taken care of. She also suggests cleaning the grout in the tile or regrouting the tile in the bathroom. 

Service all the systems: “I always say service all the systems,” Alavi said. “Make sure the air conditioning, furnace and water tank are all working properly. Get them serviced and have the current records attached to that equipment. Buyers love that. That’s what I always recommend.” 

Remove carpeting: If the home has wall-to-wall carpeting over beautiful hardwood floors, remove it. “Get rid of it, it’s worth every penny and you’ll get your money back all day long,” Alavi says. 

Security systems and smart thermostats: Consider installing a wireless security system. Alavi says people love the Ring Alarm systems, and since they are low-cost, it’s easy and it’s something buyers would love to see. She says buyers also love smart thermostats, another inexpensive install. 

Bring in professional cleaners: Once everything is done, get your listing ready to roll by bringing in a professional cleaner to make sure everything is sparkling and ready for its next potential owner. 

For more on getting a home ready to market, see our post on the 5 main areas agents focus.