The Differentiation Edge: Bringing Buyers and Sellers Together
April 5, 2020
Vice President, Realty Executives
In last month’s edition, I wrote about how squirrels and distractions keep us from achieving our maximum results and performance as an agent.
In a meeting with an agent recently, I was helping him navigate through the many distractions and perceived opportunities that show up in the real estate business. I needed to help him put all the things he was dealing with in perspective, so I asked him a question. I asked, “What the is real estate business really all about?” He thought about it for a moment or so and was clearly struggling to come up with a response, so I helped him out. “The real estate business,” I said, “all comes down to connecting buyer and sellers. Everything else is just a process of facilitating and coordinating that event.”
Market conditions shift. That is no mystery. With the shortage of inventory today, we are experiencing a seller’s market. In today’s market, many sellers, depending on the price point of the home, are receiving multiple offers. As an agent representing a buyer, the biggest challenge you might experience, beyond finding properties that meet your client’s needs, is getting an offer accepted among the many others submitted.
In this seller’s market, effectively connecting buyers to sellers requires some adjustments to ensure that your offers get a seller’s attention and maximize the chance of being accepted.
Here are some tactics currently in use that are producing good results.
- Add an Escalation Clause to Your An escalation clause is a great way to give your client the best chance to win a multiple offer situation. Here is the language we use in our counter offers. We hereby instate an escalation clause. “Fred Smith” is willing to pay $10,000 higher than your highest written offer but not to exceed $25,000. A copy of the highest written offer to be sent along with acceptance.”
- Talk with the Seller’s Agent Before Submitting an Take time to build rapport with them as well. It’s vital to approach the conversation from a win/win approach, not to sound cliché. The reality is that you and the other agent do have one thing in common; you want to get a deal done that leaves both the buyer and sellers happy with the transaction and how they were represented. Since this is true, why not take the time to discuss with the seller what your buyer’s goals are and determine what the sellers need in the offer in order for it to be accepted.
- Have the Buyer Write a Letter. This is not a new strategy, but one that can be useful when it comes to differentiating your client’s offer from others. Sometimes you can gauge whether it would be relevant to have your client write a letter after you’ve spoken to the seller’s
Recently, an agent was preparing an offer and learned that the sellers had lived in the home for quite some time and raised their family there. They were downsizing, but it was still an emotional experience for them. The buyer’s agent was representing a young couple who was just starting their family. The buyer wrote in the letter a little bit about their background, the goals and some of the things they especially loved about the home.
In this case, the sellers were emotionally moved and liked the idea that a young family was buying the home. They accepted their offer.
One thing to be cautious of in writing a letter, especially if you are representing the seller, is to be cognizant of fair housing rules and discriminations. Although it could be a difficult case to prove that someone’s offer was not being accepted because of a fair housing situation, there is a potential risk factor.
- Have Your Lender Call the Seller’s When a seller is considering multiple offers, one of the prime considerations is how solid or certain the deal is. Offers with contingencies or buyers that don’t have super secure financing might be rejected for a non-contingent cash deal.
One potential way to elevate your buyer in the seller’s eye is to have your lender contact the seller’s agent and assure them that your client is a solid, well- qualified candidate and that they have secure financing from the lender. A lender can be instrumental in differentiating your offer over others by reducing risk for the seller.
Remember, the nuts and bolts of real estate is connecting buyers and sellers together. The way you do that can vary based on your style and approach. In a competitive market, being able to effectively differentiate your offers in a multiple offer environment will maximize the chance of getting your clients the home they want, and then everyone wins.
Eden Sunshine is an entrepreneur, the creator of The Level 7 System, a speaker, author and Vice President of Operations for Realty Executive in Phoenix Arizona. Eden has coached and consulted with over 300 of the top Real Estate agents and teams throughout the USA and Canada since 2003. Eden specializes in helping businesses become scalable, positioned for exponential growth and productivity while establishing a meaningful, high performing business culture.
Eden developed the Level 7 System, which is a one of a kind, simple and systematic business development approach that guides businesses to become scalable, systems driven with great cultures. He also has developed other ancillary programs like the Systemize Your Business in 90 Days Program. He is in the process of publishing two books: The Book on Building Great Businesses and Woo Hoo: Successfully Transforming Your Business and Your World.