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How to Win a Multiple Offer Situation in Austin Real Estate

Posted by Ryan Rodenbeck on Monday, June 29th, 2020 at 3:48pm

Submitting a Multiple Offer for a Buyer in Austin Real Estate

This is really important because this is so prevalent in our market right now, I think we have about two months worth of inventory. So you really want to study these practices and really get your offer in and in really coasts the agents do the best you can to try and win, right? So you want to make sure that your offer is easiest to read, everything is lined out. We recommend read the MLS listing and attachments carefully. They're often instructions that can guide you in writing and they're often are not instructions. You want to have all the seller disclosure signed, you know, have the T-47. You want to package this up so that the listing agent knows that you're going to be easy to deal with. I can tell you when we get multiple offers and we see a very sloppy offer that does not have a pre-approval doesn't have the disclosures sign. That's a sign that we're dealing with an agent that doesn't know what they're doing and it's going to be trouble, right?

You want to text the listing agent and ask about multiple offer situations. If there are any other terms desirable to the seller, a listing agent with a listing, and multiple offers, it's getting a lot of phone calls, give them the convenience of a text message. In that text message, say, I'm happy to talk over the phone with you. I can tell you, especially if you're dealing with a Top Producing listing agent, and are very hot property, they're probably going to get so many calls. Most of these calls are like, hey, is the property still available? You want to make it easy and seamless for them. Sunny, do you have anything to add about that?

Sunny: No, I was just gonna say what you said. I mean, make sure that you know you're putting your best foot forward. Don't make a silly mistake of you know, calling them to ask what their preferred title company is when it's listed in MLS.

Ryan: Exactly right. Don't be annoying. So you're going to talk to your clients about how much extra cash they have. Because potentially cover an appraisal difference, talk to their lender about how quickly they can close and be approved for financing, and know your clients or living arrangements if they're capable of giving a lease back. So when we talk about what their lender is capable of doing, it goes back to, you know, putting zero-days for third party financing on there, right. And a lot. We talked about this earlier, but a lot of agents will kind of like what zero-days they have no time to get the approval? Well, if you've got a good lender, the lender knows when they're approving the person, if they're going to get the loan done. Okay, they can put zero days on it, if the property's in really good condition, you can make it not subject to property approval, right. Those are all things that will give you a leg up and then you know how much difference over and above list price they can cover. You're also going to talk to them about the price. This is just this is one of those things that it's really hard to coach about. And I kind of leave it, I give them a little bit of guidance, but the truth of the matter is we don't know what it will take.

So, you go and consider the price, the financing terms, close day option days and fee possession, base review title, survey, purchase, home warranty, closing costs, appraisal addendum, and preferred title. Always protect preferred title, always pick preferred title. Another thing that we didn't put in here is there are these services called UpEquity and Homeward where they will write a cash offer for you and like purchase the home. You know, that costs a seller/buyer money. So if they're selling a home and need to buy a home these services will allow them to write an offer that's not contingent.

Contingent offers are really tough. If you have a seller that needs to sell before they can buy, you really might want to consider, you know, talking to UpEquity or Homeward for that because that's a solution. But taking that aside, you want to make sure that the days for options are really short. I mean, if you have your shit together, then you can get it done in five days, put a high option fee if they really liked the home, but you know, $1,000 option fee on there, I mean, you need to have a discussion with your buyers how bad they want to do this and how many times they want to do this before they really start becoming aggressive.

I've seen agents that lose their bids on properties and a lot of times it takes a buyer a timer to realize that they're going to have to be really, really aggressive. The option fee is big, the earnest fee put a double earnest fee because let me just tell you, if I get if I'm a listing agent, and I get an offer that says close in three weeks, it's got a five day option period. It's got they say it's $3,000 and it's got $7,000 for earnest money, and it has a leaseback for 30 days, that is a really good packaged offer that I'm going to go to the seller and say these people really want this property.

So it's really important that you discuss these terms and be as aggressive as possible. I mean, what's $1,000 option fee on a $500,000 property? It's nothing. And it's also peace of mind that they're getting the property they want and they're not having to look at like, you know, putting offers on 10 different properties,

Presentation of the Offer

This is something that's really big, okay, we've had this happen before where I had it happen to As a buyer's agent, I had a buyer that was we put so many offers on, this guy would not get together, sent the offer to him, he went back and forth and told him to this deadline by 4 pm. He finally decided to send the offer at like 6:30 at night. He sent it, he finally decided to take my advice and put aggressive terms on it, but I was like out of town and like seven o'clock at night, I had to send the offer to the seller who is one of these discount brokerages and he, our offer was far higher and above than the offer that he took because he didn't even look at it. Now a lot of that was my buyer's fault because he waited way after the deadline, but the seller found out later that offer was much higher and ended up suing the listing agent over that.

My point of that is when you're putting an offer in, you want to put all of the terms in so that they don't have to go through and look at the offer. They can look at what you wrote down and see that you have a good offer and this makes you look good as well. Another thing that works to some sellers, maybe 10% and I don't think I have it in here is a letter from the buyers. I've also had a buyer take a video of the property and send it to them and that was the deciding factor they took our offer even though it wasn't this, the highest offer. Now, personally, I'm going to tell the seller to do what's best for them and scrap the video, but I can tell you that stuff works for some of these people, right? You know kind of tugs on the heartstrings.

When submitting a multiple offer contract, let the seller's agent know that we met-- Oh, this is a really key thing here okay so when you're submitting a multiple offer situation and let's say you don't know how high the property went over asking price, the seller's agent cannot disclose that to you. But if you package this property up in with everything that is really nice, nice and tidy and clean like we like on the previous slide where you showed all those terms and you call the seller's agent say look, we may not be the strongest offer okay? I don't know if we are but I do know that you can tell take a look at what we've packaged up and you can tell that we're going to be really easy to deal with Okay, so if the price were not there for the price Then my recommendation is for you to counter our offer with the price that you want.

I've had sellers agents tell me, oh, that's unethical. I can't do that. You absolutely can do that. Right. You can't tell me, okay, I have an offer at 430. You can't tell me that. That's unethical. Because if you tell me to get every other person, but you can counter me for 30 that you can absolutely do that. And sometimes you need to tell the sellers agents that and I've had an agent tell me, I can't do that. I got a list of everything. I got to tell everyone the same thing said no, you can counter my offer. And if you want to do what's best for the seller, and you believe that we're going to be the easiest to deal with, then that's what you're going to do. So this is a trick.

John Crowe: One thing I would say if you're representing a buyer, it's okay to ask because there are agents that that leak all I mean, all kinds of information all the time. So don’t worry about asking them if they did. I remember a deal I did with a top agent in town here who gave me the exact price needed to get a deal, we were actually prepared to go $3,000 higher. So my client was happy to get the deal and to say 3000 bucks. So go ahead and ask, but if your listing agent never answered that question,

Ryan: Never asked that question. But it's very ethical for someone to counter with the price that they want. I mean, think about it, you get an offer. It's all buttoned up with all these great terms, and it doesn't have the price that another offer has that that price is good, but all the other terms are crap, you know, you counter it.

Sunny: And a lot of times that start from the very, very beginning, okay, you have to set the stage from your very first contact with that agent that you're the best person to work with. So you know, don't make any like, know from the very first time you contact this person that you're representing yourself and your buyers, as the people they should choose from a number of different reasons for the price for organization and all those things. So, yeah, don't wait till you're putting the multiple offers and to make yourself look good.

Ryan: Yeah, and if you practice all these techniques on properties that have multiple offers in them, you're going to do better than the competition, you may still get beat out on a couple. But if you're consistent with these techniques, you're going to do well does anybody have any questions about this segment of it?

Caitlyn: I don't have any questions but I feel like I should chime in because I've won several multiple offers lately.

And so not only from practicing all of those techniques and letting them know that we're going to be super easy to work with. But I've actually had a lot of success not being the top offer as far as price goes but telling them from the get-go that like we're not here to nitpick the inspection.

After option at like, hey, we're coming in. This is our final sales price, and like barring anything major that's unforeseen like that. We're not coming with you, we're not coming to you with a repairman. And now I have like a very serious conversation with my buyer beforehand. So they know what they're getting into. And that's like, I mean, we've won probably three that we weren't the highest price, but just because like that the package is tied up nicely. And they know that like, it has a higher likelihood of closing and going smoothly. That's been definitely one thing factor lately.

Ryan: Yeah, telling the listing agent, you're not gonna go chase a bunch of codes that are outdated. And, and, you know, this, the key here is professionalism and what we lined out in this segment is being the most professional in mean, you know, we're in an industry where, you know, the 20% of us do 80% of the business, right? You may have some listing agents and sellers who, who don't appreciate that but you know, you're gonna run into more that do then don't

Jessica: I have a question. I have some people who are kind of resistant to checking out the UpEquity, Homeward type situations, but they're looking prematurely. So it's gonna be tough to submit an offer that's contingent. Yeah, we're under contract. I don't think they're going to qualify to carry both. I just like At what point is it always unethical, like until they close to submit an offer that's not contingent on their selling?

Ryan: The answer is yes. Because one thing that I've noticed with the third party financing, if you were to ask a lender, if I write a contract for a property, and can I go back to the third party financing on it because they didn't, they weren't able to prove because they just they were too They need to sell their home that doesn't that's not an out on the contract. And you need to know, let your buyers know that right? You're playing with fire by doing that. Because let's say you get under contract, you list their home, or it doesn't sell and then, you know, I've talked to two lenders about this, they are not going to cancel that contract, because the other home didn't sell

Jessica: At least back for them and get further along are done with that process.

Ryan: Now here's I'm speaking in the sense of like, you know, someone who hasn't listed their home yet. I think you can roll the dice there. If you're, if their home is listed and under contract, and you want to write an offer that is not contingent, I think you're going to be rolling the dice, but you're in a better position. And that's going to be you just need to kind of watch those timelines, right.

Like, I'll close off From the option period, like if you're the buyer, their home is under contract and you're past the option period, past the title days for title commitment, past the appraisal, then you're in a much better position, especially if you feel comfortable about the appraisal. And the way I look at that, and we've explained that to buyers before is that. If the first buyer cancels, you're probably gonna, you know, after all those terms are up, you may lose your earnest money with the property you're buying, but there's also a domino effect, kind of make it more of a wash. So it's just being strategic and putting a little finesse in there.

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