Because inventories are shrinking, agents need to find creative ways to make their buyers’ offers stand out
By Andrew Conner
Even before the COVID-19 pandemic hit in March 2020, residential real estate agents were seeing inventories shrink and increased competition for homes.
The coronavirus only exacerbated these trends. Realtor.com reports that national inventory dropped by 42.6% in January 2021 compared to January 2020. In that same time period, the inventory of newly listed properties dropped 23.2% nationally and 17.3% in large metropolitan areas.
With that in mind, you might be thinking about how you can make your buyers’ offers stand out to listing agents in a sea of other offers. Talking to agents across the country, there are a number of ways you can make your offer more attractive to sellers.
Crafting an appealing offer
When it comes to making your offer more competitive, the first thing that comes to mind is increasing the price. And, of course, this often works. But if you’re in an extremely competitive market and you need to go beyond offering additional money, or if your buyer isn’t interested in going over the list price, there are other ways you can make your offer more appealing.
A clean contract: A good starting point is ensuring your offer is clean. “A clean contract is one without errors or blanks and with solid terms. This shows the listing agents that you are detailed and your clients put their best foot forward,” says Therese Jenkins, regional broker at Sentry Residential in Charleston, South Carolina. “As a listing agent, I once received a contract with 13 errors and/or blanks! My clients chose to proceed with this one, and as I suspected, the buyer’s agent was extremely disorganized, and the deal was difficult from day one.”
Pre-approval: Another key aspect of an attractive offer is loan pre-approval. In a competitive market, a strong, clear pre-approval from a lender is almost a necessity. When a seller has a pile of offers and one doesn’t have pre-approval, it is easy to remove it from consideration.
“To be in the best possible situation to have an offer accepted, the buyer must be pre-approved with a lender,” says Doris LaBeau, CRS, broker/co-owner with RE/MAX Masters in Flat Rock, Michigan. “And be aware that the pre-approval process is subject to things like verifying credit scores or employment. I always recommend going through the pre-approval process with someone on the lender side who will verify information and confirm they completed a preliminary search.”
A quick close: For Roseline Cristanelli, CRS, broker/owner with Reliance First Realty in Tempe, Arizona, one advantage she provides for her buyers is a quick close. “If I know we have to compete for the offer, immediately on my way home from the showing I’m on the phone with the seller’s agent asking them what the most important terms for the seller are because sometimes price is not it,” she explains.
Cristanelli has a local lender she works with who, when approved by her clients, can be relied on for closing within 21 days. This gives her buyers an edge when the seller is motivated to sell quickly.
Cristanelli also uses other techniques to shave time off of the transaction. “For some clients, we’ll waive the appraisal contingency,” says Cristanelli. “Usually people order the appraisal after the inspection, but we’ll do both at the same time. That way, even if the appraisal comes in low, during the inspection period there are many things you can do for your buyers to cancel.”
Cristanelli also recommends paying rush fees for appraisals when time is a factor: “It usually costs a couple hundred dollars, and that is always money worth spending.”
Include a cover letter: Additionally, Cristanelli includes a cover letter in every offer she sends.
“I summarize the terms and conditions of the offer and include a brief summary of who the buyers are,” she says.
Getting buy-in from buyers
All of the above strategies will help your offer stand out to a seller. However, if you can’t get buy-in from your buyer on using these strategies, they are useless.
Coaching clients: “I think coaching clients is really important,” says Cindy Ulsrud, CRS, with Ferraro Real Estate/eXp Realty in Madison, Wisconsin. “We have an initial consultation with most of our clients, and during that conversation we talk about what the process looks like, from the prequalifying stage to closing.”
In a competitive market, this is even more important. “If you see a house you like, you need to decide immediately whether to make an offer because it could be gone in the next hour,” says Ulsrud. “For first-time homebuyers it can be overwhelming. They see a house they fall in love with, and then everything happens so quickly.”
Lynn Fairfield, CRS, with RE/MAX Suburban in Libertyville, Illinois, views this type of consultation as essential to managing expectations with clients.
“I look at it as an educational process,” says Fairfield. “You have to prepare the buyer by explaining they will have a competitive edge if they do things like accept the home ‘as is.’ The market has changed, and as REALTORS® we need to change with it, giving a different level of education to and advocacy for the buyer. With limited inventory and the pandemic, the whole dynamic has changed. You have to understand what’s going on and make sure your buyer understands that if you want to buy a house, you have to play by these rules.”
Listening In
One tip Lynn Fairfield, CRS, with RE/MAX Suburban in Libertyville, Illinois, has for buyers and their agents who want to make a good impression with a seller is to remember that you never know who might be listening to you as you view a house. Particularly in these socially distanced times, sellers likely won’t be in the same room as you, but they could be listening through an Amazon Alexa or Google Home, Ring doorbell, or even a home security system.
“This is anecdotal, but I had some buyers who talked about how wonderful the house was during the showing,” says Fairfield. “It was a very popular house; there were three cars lined up right after us. But we were successful and the listing agent told me the seller said, ‘We want the people who came in at 10 a.m. with the RE/MAX agent,’ because they heard us talking and thought the house would be perfect for my client. Whether it’s an Alexa or a Ring doorbell in the driveway, I always tell my clients to be careful about what they say.”
For more effective and efficient ways to increase your inventory, check out the course Creating Listing Abundance at CRS.com/learn.
Photo: iStock.com/ssnjaytuturkhi
