Throughout your career as a real estate agent, you’ve probably seen it all when it comes to how the buying process plays out for your clients. It’s true that while the steps are mostly the same for everyone, the ebbs and flows of the process can differ from client to client and home to home, especially during competitive times like these.
If you’re lucky, you’ve had families who fall in love with the very first home you showed them, made an offer, and had the offer accepted that same day. That qualifies as pure homebuying bliss.
But you’ve likely also had those scenarios where it takes a client months (or even years) to find the right place. When they finally have their dream home insight and make an offer, someone else swoops in at the last minute with a more substantial bid. Ugh!
Nevertheless, as their advocate and trusted expert, it’s your job to do anything possible to ensure that they keep the momentum to find the home they want, make competitive, well-informed bids, and score a house they can call home for the next several years.
Even during competitive buying times, you can help make that happen by coaching your client on what they need to do to be the most competitive buyer bidding. A competitive offer is an obvious choice, but there are additional steps that can increase their buying power while ensuring they are not overpaying for a home.
Here are five ways you can help keep your clients be competitive in the homebuying process:
Encourage them to get pre-approved
To be competitive in a seller’s market, buyers need a head start. That begins with knowing how much they can afford. Not only will that save your client time by looking at only homes in their price range, but it also communicates to sellers that the buyer means business and is ready to move quickly.
Other advantages of pre-approval include increased buying power, a streamlined buying process, and the ability to close on the house faster than the standard closing process—all of which a seller is inclined to consider.
Help them decide on must-haves
We must be close to grandma. We need to live in that school district. No more than a 20-minute work commute. At least four bedrooms, two bathrooms, plus an outside patio or deck and walk-in closets.
Before your clients get too deep into the homebuying process, encourage them to be decisive about their must-haves, must-wants, and deal-breakers. In a competitive market, things move quickly, so there may not be time for waffling on the most important things. From the time you start showing them houses to the time they sell, the clock is always ticking.
Having a non-negotiable list of wants, needs, and nice-to-haves will help your client be able to act quickly when they come across a home that checks all the right boxes. If they hesitate, even for a day, they could lose out.
Prep them for a bidding war
To be a competitive buyer in any market condition, but especially in a seller’s market, your client must be prepared for a potential bidding war. They could be competing with one other buyer or many more. You should tell them to assume they aren’t the only one making an offer. Since they’ll be pre-approved, they’ll have a good idea of how high they can bid without overextending themselves.
Therefore, encourage them to put forward one of their very best offers at the start. That will communicate to the buyer that they aren’t trying to low-ball them and that your client is willing to start the conversation with realistic expectations.
If you sense that your client strongly believes that a specific house is the right one for their family, encourage them to jump on it. But make sure they know that in a competitive market, deals are rare. They should expect to pay at least market value. When competing against three or more other offers, the chances are high that at least one of them will be above the asking price, so point out that sometimes winning a bidding war isn’t always about offering the most money.
Preach patience and persistence
As you know, the home buying process can be slow-moving – especially for buyers in a hurry to find a home and get moved in. Initially, you’ll do them a favor by setting realistic expectations regarding a timeline to get them into a new home.
House hunting can bring emotional highs and lows, so help them manage their reactions to surprises in the process. This could include offers being declined, a prospective sale falling through, or other hiccups that might arise. Encourage them to allow logic and persistence to guide their decisions during the process, rather than frustration or anger.
Competitive buyers increase their chances of finding a home quickly. With your help, they will be prepared before starting the process, have realistic expectations, and be willing to make quick decisions when necessary.
Send the sellers a personal letter
If you really want to stand out from the field of bidders, consider pulling on the seller’s heartstrings through a personal letter. The goal is to convince the seller how awesome you think their home is and how much you’d like to live there.
Even though they are selling, they may still feel emotionally attached to their home, and your letter may give them peace of mind that you’ll take extra special care of “their” home. When crafting your letter, be short, stay positive, and thank the seller for their time and consideration. One thing you should NOT include is a mention of any remodeling you may have in mind.
*Not all borrowers will qualify. Contact us for more information on fees and terms. Not intended as legal, financial, or investment advice. Contact your financial representative for more information.
6 winning tips to buy a home in a competitive market. (2016, October 14). Retrieved March 18, 2021, from https://farrellrealty.com/blog/6-winning-tips-to-buy-a-home-in-a-competitive-market/
Crew, K. (2021, March 10). How to be a Competitive buyer in today’s housing Market [INFOGRAPHIC]. Retrieved March 18, 2021, from https://www.keepingcurrentmatters.com/2021/03/12/how-to-be-a-competitive-buyer-in-todays-housing-market-infographic/
Nazaryan, E. (2021, February 08). Sailing through today’s Competitive home-buying process. Retrieved March 18, 2021, from https://www.pilotonline.com/life/real-estate/vp-hl-realtor-on-call-emil-nazaryan-competitive-home-buying-020621-20210208-etytyw54vzgujn2bm2p4qjehvm-story.html