In today’s market, buyers and sellers are (more often than not) finding themselves in multiple offer situations. In fact, some sellers are getting multiple offers mere hours after going on the market, or before going on the market at all!
According to the National Association of Realtors, on average, there were four offers for every home sold in February 2021. This is a big step up from a year ago, when there were only two to three buyers for every home sold. It’s now more important than ever that clients come to the table with the strongest offer available. Here’s how you can help.
Your client needs to have all of their ducks in a row before they even think of making an offer. Make sure your client is pre-approved (not prequalified) for a mortgage or they have everything prepared to make an all-cash offer. Having everything prepared not only narrows down the search for an affordable home, but can streamline the process and make it much more efficient. It also shows the seller that your client is serious and that the offer isn’t likely to fall through. With the current market, sellers won’t be willing to waste time.
According to Norada Real Estate Investments, the U.S. housing market is 3.8 million single-family homes shy of what is needed to meet the nation's housing demand. Homes aren’t sitting on the market for very long, sometimes going into contract within 1-3 days, and you need to be the first one in the door. Once a property hits the market, you need to act fast and make sure your client sees it as soon as possible and feels confident enough to make an offer.
If you hear that you should submit your “highest and best offer,” you should submit an offer as soon as possible. The first offer usually comes from serious buyers and can be prepared even before viewing the property. If your client decides to move forward, you have everything prepared and ready to go. While an early bid doesn’t guarantee anything, being the first competitive offer could make your client stand out in a multiple offer situation.
While contingencies can be a powerful negotiation tool, a host of contingent offers can make it harder to close the deal. Sellers have their pick in this market and extra contingencies can be a hassle. Some buyers are even purchasing without seeing the home first. So, removing whatever barriers your client feels comfortable with is a good idea.
Once the offer is submitted, follow up with the listing agent to confirm the offer was received. Continue to follow up to see if your client’s offer is still a top contender. Ensure your client is top of mind.
It’s no secret that all-cash buyers have the upper hand in this market. When your client is in a multiple offer situation, cash is usually king. Sellers may choose a cash offer over higher bids because there are fewer roadblocks and it’s more likely to close. The extra steps that come with a mortgage lender can add weeks to the process.
Today, cash offers are possible for most buyers and give them the edge in a hot seller’s market. Ribbon can turn your client’s offer into all cash with no contingencies so that they can win in a multiple offer situation. If your client’s offer is accepted, they can move into their new home and prepare financing for the home afterward.
When selling a home in this market, multiple offer situations are standard — sometimes resulting in bidding wars. This can be very exciting but also a bit overwhelming for a seller. Luckily, you’re here to help. Here are a few things to keep in mind.
You understand offers and jargon more than your client does. So help your client organize all offers and look at the advantages and disadvantages of each one. The highest monetary bid may come with a list of contingencies and it doesn’t mean the sale is a sure thing. Compare the terms and conditions to the offer the buyer is willing to make. There also may be room for negotiation to work out any issues. Share all of this information with your seller so they feel confident and ready to make a call.
The needs of the seller should always come first. So make sure you know exactly what the seller wants. Do they want to sell and move as quickly as possible or do they want to wait until they receive the best offer? Knowing this before you list will help keep the ball rolling.
It’s not always about the price tag. Let’s look at an example. Your client receives three offers on their home:
Which is best? It’s hard to say without talking to a client and taking a deeper dive to see all the offer details side-by-side. Ribbon’s new iOS app, RibbonHub allows agents, and their clients, to compare, discuss, and negotiate offers all in one place—no spreadsheets needed.
If you want to learn more about how Ribbon can help you and your clients in a multiple offer situation, chat with one of our experts.