Yes, I do only get paid if you buy a home, and I think you should offer 112% of list price, waive inspection, offer to pay the difference between contract price and appraised value out of pocket, and allow the sellers to name your first-born child.
Funny click-bait blog titles aside, we do find ourselves in a funny situation right now, don’t we? We need our clients trust us, and we are focused on doing what’s in our clients’ best interest; but it can be difficult to advise a buyer how to write a great offer without sounding like we’re just trying to get paid. On the one hand, in a crazy seller-friendly market, it’s pretty obvious that in order to write a winning offer, a buyer is likely going to have to pay a premium and waive one or several contingencies (inspection and financing being two big ones). On the other hand, it’s also true that some agents out there are willing to sell out their buyers in order to secure a commission next month. So what’s a pure-of-heart agent to do?
First, let’s be clear. Not all houses are worth buying, with or without a premium. Hopefully during your time in the car with your buyers you’ve made that clear. You’ve spent hours (days/weeks/months!) teaching them to look critically at homes, and to identify a good house, on good dirt. You’ve helped them avoid buying the wrong house – several times. And you’ve told them that every time someone buys one of those dysfunctional houses or lots, the buyer pool has gotten a little shallower. If you’re doing that part right, they’ll be inclined to believe that your advice about an offer is coming from the right place.
What it comes down to is this: in order to give your best advice, and for them to really hear it, you must believe they trust that your counsel isn’t self-serving. The first time you tell a new buyer what it’s going to take to win a bidding war, it’s going to be hard to swallow. My own mother (hi mom) would likely balk. Because the kind of offer that will win does seem a little bit crazy, right? Sure could look like you’re just trying to get a contract/commission. Believe it or not, the best thing might actually be for them to challenge your motives. Let them. And don’t take it personally. Acknowledge that it is a reasonable theory, and then go right on teaching them what it means to be in a sellers’ market. Of course, all of this is a lot easier if your client is a referral from someone you’ve already helped and who has shared how much you did to help and protect them; but it can be done with an internet lead as well. It’s just harder (sometimes work is work).
Sometimes it can’t all happen right away. Sometimes you have to write and submit an offer that can’t win. That’s okay. This is a process, and there will be other houses. Not a lot of folks get the first house they swing at, and it can be instructive to follow that first house to close and see what it went for. Also, a lot of listing agents will disclose information about competing offers and sometimes will share the terms of the winning offer (as an aside, some agents believe they cannot disclose this information; but they can!)
To be the most successful, the agent/buyer relationship demands trust. When you can trust them to hear you, you will be free to give them your best.
*next week we will discuss in greater detail how to communicate some of the more important aspects of a strong competitive offer to your buyers.