Educating buyers on the importance of submitting a competitive offer.
By Mike Selvaggio, CRS
Have you ever had buyers who decide to submit unrealistically low offers on every property they are interested in, no matter what you tell them? This can be a frustrating problem, not only for REALTORS®, but for their clients as well.
One strategy agents can use to convince buyers to make a competitive offer is to print out several listings that have recently sold. Next, find the percentage of the total asking price that each home sold for. Mark this percentage on each listing with a big Sharpie to make it big and bold you want your client to get the message.
You may have several examples ranging from 92 percent to more than 100 percent. Showing these to your clients will demonstrate the high number of properties that are actually selling within a reasonable percentage of the asking price. Then try to frame the issue properly when you explain it. For example, you might say:
Mr. and Mrs. Buyer, if you find a property that you really like and for some reason do not want to pay the asking price, I want to give you an advantage when it comes time to negotiating. Would that be okay with you?
As you can see, these are properties that have recently sold in our marketplace. Ive marked the percentage of the asking price each received. If you want to make an offer less than the asking price, you know that the market currently is entertaining offers from 92 percent to 101 percent. Many uninformed buyers who think that they can make offers 20 percent below the asking price are severely disappointed when a seller does not accept it. I wanted to give you this data in advance before we begin our search for your new home.
Buyers need to know the market and understand that they are competing with other homebuyers. It is important to do this before they look at the first property. With this strategy, you are more likely to convince buyers to submit a competitive offer and close the deal.
Mike Selvaggio, CRS, is a Certified CRS Instructor and broker/owner of Delaware Homes Real Estate in Wilmington, Delaware. He can be reached by email, twitter, or his website
