In real estate, many times agents will encounter a situation where they are in a multiple offer scenario. This can apply to both leasing and buying, as sometimes a rental house can be as competitive if not more so than a sale. It is our job as agents to make our client look impeccable to a seller / landlord. How do we do this and ensure that everyone gets what they want out of the transaction?

I believe that in order to successfully accomplish this, the agent who represents the buyer or tenant needs to put their “detective” hat on and do some investigative reporting.

When your client is ready to either apply for a property or make an offer, call up the other agent involved and ask a lot of questions. The goal is find out as much information as the other agent is willing to reveal. Many buyers’ agents see a listing agent as a poker player that wears dark sunglasses in order to hide their negotiating position. This is simply not true. Oftentimes, a seller will direct their agent to reveal basic information about their position in hopes of getting a deal done. Even if the other agent does not reveal much, this communication helps to strengthen an offer as it develops a rapport with the other agent. Ask questions like these:  Are there any offers on the property? Are the move-in dates flexible? Do you prefer a tenant with or without pets? When do the sellers have move? Why are they moving? What about non-realty items? Etc. Let the other agent talk as much as needed and ask a lot of open ended questions.

Now that you have obtained some information about that property, it is time to write your offer and use that information to your advantage. Write your offer and ask your clients to prepare a letter introducing themselves to the seller / landlord. This helps to add a personal touch to the transaction and reminds everyone that there are actually real people involved, not just dollars and cents. After writing your contract, summarize the key points into a cover letter so that the other agent can quickly read it.

These are the 4 key points on either a contract or a lease applicant that can make your client stand out over others:

Price

Obviously, price is the single largest deciding factor in whose offer is accepted. If your client is in love with a house and you know there are multiple offers, ask them if they would be willing to pay at or above list price it.  

For a rental this could mean asking them to pay $15-$25 more a month in rent if they have some flexibility in their gross income levels. When all other conditions are the same, if a client is willing to offer more money this alone can help to win the offer.

In both cases, offering a larger deposit can help strengthen the offer too as it shows a greater commitment to going forward.

Closing Date, or Move-in Date

Dates can actually be a doubled-edged sword because if dates are too aggressive, it may scare off the other party. An overly aggressive closing date may put other party in a position where they may feel that they will not be able to perform under the terms of the contract and it is rejected. On the flip side of date, a closing date that is too far in the future can be rejected also because the seller is afraid that the longer the closing date, the greater the chance the buyer will cancel the deal.

On leases, a move-in date is just as important. Many times a landlord, especially on occupied property actually prefers a flexible move-in date as it allows them enough time to do a make-ready. For these reasons, it is especially important to pay attention to the dates that everyone needs in order to make a solution that works for everyone.

Terms

This is the part where the theory of “what is in it for me” from the perspective of the seller / landlord comes to play. It is here where the information you discovered earlier will really shine.

In other words, what can you offer the seller or landlord that nobody else can? Is your offer a cash offer versus 3^rd party financing? If your client is financing their purchase are they already pre-vetted?  Does your client not need to sell another house before buying a new home? Does your prospective tenant have any pets? If so, do you have pet references for them? What about special provisions? Are you asking for any non-realty items and if so how much are you offering? Who is paying for the survey? Are you negotiating for any repairs? Are you agreeing to use the seller’s preferred title company?

The last one can be surprising negotiating point. Most title companies do the same thing, but by insisting on a different company other than the seller’s preferred title company it sets a bad tone that the buyer is going to nitpick. Not only that, but the seller’s title company has already opened title on the property. Insisting on another title company can actually delay a deal and waste precious days.

Option Period and Buyer Credit Verification

This one only applies to purchasing, but is nevertheless very important. A seller wants to determine that if they accept an offer that the buyer can perform to the terms of the contract. While a longer option period benefits the buyer, it hurts the seller. The longer the option period, the more opportunities the buyer can cancel the contract. Use no more than ten days for an option period, unless there is a good reason to do so otherwise. A seven day option period also looks better than a ten day option period.  

As for buyer credit verification, this date is typically the final date that the buyer has to pass credit criteria, if they are financing the house. During the time between the executed date of the contract and the date of credit verification, the buyer has to submit their tax returns paystubs, asset statements, etc.

The lender is responsible for verifying employment and that all documents are truthful. Generally speaking once a borrower has cleared this hurdle, they are clear to close, subject to the property meeting underwriting criteria. This is obviously very important to a seller, because once this period has passed; the seller is almost certainly going to sell their house. The buyer has few remaining outs in the contract at this point.

Offer a realistic date, but not too far in the future such as 21 days. Now, if you are working with a highly organized buyer that can get all of that ready quickly, use a shorter date such as 14 days. A shorter date looks good to a seller but the buyer has to be able to comply with that timeline. Don’t use this technique if there is any doubt in the buyer’s ability to obtain all of those documents as it can severely backfire on you.

I hope you enjoyed reading my blog about negotiating strategies and I believe that employing these strategies can help you to win more deals.

If you would like any more information about negotiating strategies or buying a home in the Austin area, please contact me at 512-693-9297 or jordan.gouger@kw.com

Please visit my website at http://jordang.kwrealty.com

Photo Credits

1. Cute Detective Stock Photo Illustrator – www.istockphoto.com
2. Raining Money - http://image.yaymicro.com/rz_512x512/0/3fe/raining-money-3fe754.jpg
3. Calendar Icon www.istockphoto.com
4. Dancing Document –www.mystockvectors.com