The craziness has returned to the Northern Virginia market!
If you are new to this (translation--you weren't in the business in 2005-2007), you might feel like it is hard to keep up. Representing the best interests of your client can be a challenge when the market is this competitive. Being prepared, and thinking 5 steps ahead, is a good start! But what can you expect to see in this competitive market place and how should you prepare?
1) Multiple offers. Be sure to talk to your clients (buyers and sellers) about how they want to handle multiple offers. During the slow times, this felt like more of a theoretical contract question, but when things are this busy, it is critical that you have a substantive discussion and understand your client's position. There ARE buyers who will be scared off knowing that there are multiple offers on a home, so whether the seller
wants you to reveal this is critically important.
wants you to reveal this is critically important.2) How will you handle multiple offers? First in? Highest price? Who will you choose to deal with first? It is always your client's choice, but they will look to you for advice. Remember, your duty is always to get them the best contract (and sometimes, but not always, that means highest price). If you are representing a buyer, how do they feel about competing for a home? Make sure you have this conversation before you are in the situation.
3) Escalation clauses. Read through the form and be prepared when your buyer client tells you they 'really want that house!' It can be a great tool if it doesn't result in your client paying more than they are comfortable paying. If you are a listing agent, remember, a good contract is about money, but it is also about the other terms.
4) Understand what motivates the other party. Everyone wants to sell for the best price, but there are times when the best contract provides the seller flexibility. This might mean it is a quick sale, or it can mean they can settle, buy their new home and rent back. Take the time to find out what would make an offer attractive--in addition to the price.
5) Don't Delay. If your client is set on a specific area or neighborhood, make sure that they know that they need to be ready to drop everything and go if a property comes on the market. Clients (and agents, for that matter), who don't move quickly will lose out. It isn't fair, but that is business. Sellers need to be ready to show their home THE SECOND that word gets out that they are selling. When there is an inventory shortage, agents are working hard to find these 'coming soon,' opportunities and they won't want to wait until the property goes into the MLS to see it!
That old adage, 'be careful what you wish for,' perfectly describes the current Northern Virginia market. When things were slow, we all wished that they would pick up. Guess what? They have!
Preparation, flexibility, and speed can be the key to success in a quick moving market. If this is your first time in the game, be sure to do your homework and have the necessary discussions with your client. Good luck out there!
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