2020 Bidding Wars: How to Win
By Mark Mathis, VP of Sales for Homes.com
At the start of the pandemic, the housing market nearly screeched to a halt. When most states moved to mandatory quarantining and strictly enforced social distancing, agents were, rightfully, concerned with the future of real estate. Now that some COVID restrictions have lifted, there has been an influx of buyers ready to make their move. However, the new challenge is that, now, there are not enough homes for sale to fulfill the number of buyers.
Many people are beginning to face the reality that they could be working from home for the foreseeable future. This is pushing a number of them to look for a larger home with more home office space. However, while buyers are ready to move into a new home to accommodate these needs, sellers are moving more slowly. This is partially due to financial fear but also a strong desire to keep strangers out of their home during a pandemic.
According to a recent report, new listings decreased by half during the second week of April when compared to that of 2019. Because of this, many buyers are in the midst of bidding wars. In order to help your clients make it through this challenging time, here are four tips to help your clients win a home-buying bidding war.
Ask About Pain Points
One of the best ways to encourage sellers to choose your client is by fulfilling a need. Talk to the seller's agent ahead of time and let them know your clients are very interested in the home. Try to find out if there are any pain points, such as needing an earlier moving date, that you can help to alleviate. Once you have these ideas, talk to your clients to see if they're flexible or able to help with this need. This can help put you at the top of the bidding list.
Shorten Your Contingency Timeline
Another option is to shorten your contingency timeline. This can be helpful because sellers can be more motivated to work with buyers who are less likely to back out. If there is less contingency time written into your contract, which would allow for more opportunity to change your mind, sellers may feel more confident with your clients. Therefore, shortening your contingency timeline can show that your clients are serious.
Ultimately, the majority of sellers are looking for the way to get the most return on their investment. While it's not necessarily better to overshoot the listing price by a huge amount, offering slightly more can be beneficial. In addition to this, if you're able to offer a cash payment, this is usually the most attractive offer, because it takes away opportunities for something to fall through with the lender. Unfortunately, this just isn't an option for most buyers. If this isn't something they can manage, encourage your clients to increase their down payment amount to show buyers they're serious.
Make a Personal Connection
Finally, keep in mind that buying and selling a home is a highly emotional experience. Some sellers can be very particular about who they want living in their old home. After all, this is the place that they built so many of their memories. Ask the seller's agent who their clients imagine buying their home. Once you have an idea, encourage your clients to write a letter to the owner that details why they want to buy this home. If they're hoping to start their own family or want space for grandchildren to visit, be sure they include this kind of information. Not only could it align with the seller's values, but it also heightens the emotion behind the transaction. This shows that your clients are more than just another number in the bidding war; they are real people.
While this is a challenging time for buyers in the real estate market, these four tips can help make it easier for your clients to find and win their perfect home. Help move your clients into their dream home this year, so they can start 2021 in the best way possible. During a challenging time in real estate you have to be diligent in winning a bidding war to get your clients the home they want.