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In this hot market, real estate agents need to be up to date, grappling with bidding wars and multiple bids while protecting the interests of their clients. At an Inman workshop titled “How to Navigate Multiple Offers” during Connect Now on Tuesday, Maura Neill, Team Leader at RE / MAX Around Atlanta Realty, and Koki Adasi, Team Leader at Compass, shared their tips and tricks with host Craig Wilburn by Keller Williams Realty Gainesville.
“Like many of you, we are experiencing challenging times on the buy side and even on the sell side,” said Adasi.
Over the past few months, both Adasi and Neill have reported seeing 10 to 30+ listings for property in their markets, even when million-dollar properties have received multiple offers.
Adasi also noted, however, that the rush of offers has subsided somewhat in the past two weeks as more and more buyers are de-registering from the market because they fear that they will not be able to win a bid on a house.
“There is some significant buyer fatigue in the market,” Adasi said. “So you see places that you would think would have 15 offers for a property, now there are 3 or 7 offers …”
Adasi said that choosing the best deal often only boils down to which buyer is willing to spend more money and potentially take more financial risks.
“With all the tricks and things I’ve seen, it comes down to the money,” he said.
The most attractive offers tend to be those where buyers pay for both sides of the transfer and taxes, or offer to pay the seller’s listing broker.
Neill added that buyers also refrain from naming closing dates and instead let the seller dictate those terms.
“The financial risk people are taking is much more extreme than we’ve seen in the past,” she said.
Neill also said that sellers in their Atlanta market responded well to what Georgia calls “option money.” This is basically extra money a buyer can offer to a seller that doesn’t affect the valuation. Depending on how the contract is written, the option money can be paid directly to the seller or held in an escrow account of the party holding the money earned. Sometimes it can be refunded to the buyer, sometimes not. Likewise, it can be released upon termination of the contract or earlier – it just depends on how the contract is drawn up.
“It is a legal way for the buyer to offer the seller money outside of the purchase price that may or may not be used for the down payment,” Neill explained. “This is the thing that wins the contract.”
“I hear people saying this is not going to work for my market, this is not going to work for my customers …” added Neill. “Go to your broker, see your legal advisor, and see what it takes to make this legal in your state. It could be that silver bullet for that buyer who really wants this home. “
Neill said the amount of option money on offer can vary widely, but tends to hover between $ 2,000 and $ 2,500 in their market. But there have been times when even a small amount made a difference to the seller because of the gesture it makes. “We’ve had sellers accept option funds as low as $ 500,” Neill said.
With so many offers on the table these days, one workshop participant wondered how agents could better spy on “bait and bills” buyers.
“As a listing agent, it is your job to uncover all risks in the contract and to reduce risks,” said Adasi.
Agents should carefully review financial information and obtain this information in writing from lenders to ensure that sellers are not taking any greater financial risk than necessary. Also, make sure in contracts that if a property is valued lower than the buyer’s offer, the buyer must be willing to pay the difference.
Neill later added that sellers should exercise caution in accepting offers that do not require evaluation. “If you don’t check it out, and her [put forth] Your skin in the game is so small that it makes little money, ”she said.
To make it easier for sellers to navigate offers, Neill and Adasi both use organized Excel spreadsheets that help buyers clearly identify different components of different offers and weigh what is important to them. Neill said she color codes her chart so she can mark things for the seller to be sure and take note of.
Finally, the speakers at the workshop discussed the importance of complying with the Fair Housing Act by ensuring that all buyer agents receive the same information in multiple offer situations.
Neill said she will often have her sellers write a thank you letter to bidders stating that an offer has been accepted and possibly why, depending on the circumstances, so that communication is perfectly consistent across the board. In this way, the seller also shares this information directly and unsubscribes so that it is completely independent of the seller agent.
“And please, for the love of God, stop using the buyer’s love letters,” added Neill.
Email Lillian Dickerson