Home buyers in Silicon Valley are getting frustrated, discouraged and disheartened as they write offer after offer, only to lose out in multiple bid situations. It’s not just the poor small down payment home buyer either – this is happening to those with 20% down and more too.
What can be done to improve the odds of success?
Usually losing out is a simple case of the best price and terms winning out. (I wrote a series of articles on how to compete in multiple offers that you can find here.) At times, though, there’s a bit more nuance, especially if there are two or more bids which are “neck and neck” or nearly tied. Sometimes the buyer’s agent either does or doesn’t do certain things which can impact how your real estate purchase offer is viewed by the listing agent and seller(s). Here are 5 important things that the buyer’s Realtor or sales person can do which will help the odds of success:
- The agent should read the MLS printout carefully to see if there are any instructions regarding offers. This one may seem obvious. but too many buyer’s agents just draft the offer and send it in, ignoring information that will probably be useful (such as offer deadline, preferred form – CAR or PRDS contracts, availability of disclosures, the request to call before writing the contract etc.). Ignoring clear instructions will usually result in creating bad feelings between the parties or their agents, and lessen the odds of success.
- The buyer’s agent should call or email the listing agent before writing the offer (and after reading the MLS!). Sometimes there are requirements or just preferences that won’t be known unless contact is made. Additionally, though, the listing agent will simply want to know about the level of interest and not have any surprises – it’s a courtesy call. If the relationship between real estate agents is improved, so are the odds of success.
- The agent should ask if it is possible to present the offer in person… and be willing to do it, of course. Many seller’s agents won’t want a live presentation (most would email), however the fact that your agent is willing to spend the time and make the effort to present in person usually speaks volumes about his or her professionalism. It’s also a hint that the agent is a cut above most. In my real estate practice, several times I beat out other offers by asking if I could meet with the listing agent and sellers to discuss my clients’ offer, and then doing it. (With my multiple offer situation yesterday, only 3 agents requested to present to me live. One of them had the winning contract. Of course, the rest of the package was also super strong – but this one step is a clue to the whole offer strength and commitment.)
- Ideally, the offer package should be comprehensive and come with as much documentation as possible, including an offer summary (by the buyer’s agent), pre-approval letter, all disclosures signed (especially the TDS / AVID), contract with all initials and signatures and all mandatory spaces completed. A good buyer’s agent will also run comps and coach the clients on offer price and terms and may encourage the buyers to write a letter to the sellers. Also common now, “proof of funds” are wise to include too. Each situation is a little different but the more comprehensive the buyer’s offer package is, the better the odds. Many agents send over only partial documentation. Don’t let this happen to you!
- Finally, the buyer’s agent needs to behave with professionalism and courtesy. This is another point that might seem obvious, but sometimes buyer’s agents say things which are not polite to either the listing agent or, worse, directly to the seller. Or they or their clients may show up at the house without an appointment – who would want to work with them in contract after that? When in the presence of the seller, the listing agent and the public especially, a buyer’s agent should not loudly or harshly criticize the property. That’s just plain hostile and it won’t make the listing agent want to work with that agent (now or later). Realistic assessment of a home’s flaws is totally fair, but doesn’t need to be done with a bullhorn. Discretion is appreciated.
It doesn’t happen often, but sometimes agents just don’t slow down long enough to get the process and the offer package “just right”. It matters because frequently there are several equally good bids on a property, and the one that stands out as better, even by a small margin, will either win the deal or at least win a the opportunity of a counter offer.
For more reading:
Silicon Valley real estate bidding wars
Is your lender keeping your offer from getting accepted?
Home buyer tips