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Post Game Wrap-Up: Why Did Your Offer Lose?

By
Real Estate Agent with Coldwell Banker - Palo Alto, CA 01442831

 Team Lost

 

I just watched the 49ers lose to the Cardinals. This is the second game they’ve lost due to a second-half collapse. For hours after the game, I heard expert commentators discuss why the 49ers lost. What happened to them in the second half when they started out so strong? Did they have poor coaching? Was it the quarterback’s fault? Have they lost their mental edge?

In fact, the postgame wrap-up got me thinking, since similar questions could just as easily apply to competitive situations in real estate. Prevailing in a multiple-offer bidding war is like winning a football game. You have to have a strong defense, an aggressive offense, a skilled quarterback, and a winning mindset in order to come out on top. When you lose a home you love in a bidding war, it is important to perform a postgame analysis. It is tempting just to walk away telling yourself that you got outbid. What could you do? However, like a pro football team, you need to review the game and understand exactly why you lost.

The five most important factors to review:

1.  Game Match Up

One of the first things experts look at when analyzing a football game is the game matchup. When analyzing a loss in a bidding war you need to look at whom you were up against. Were you competing with a foreign buyer who had all cash? If so, it wasn’t really a level playing field. Foreign buyers with all cash have an almost unbeatable offense – money. They generally offer significantly over the asking price and promise a fast transfer of funds and a quick close. I’ve seen deals with foreign buyers close in three days. If you have to get a loan, it is going to be very difficult to win.

2.  Offense

The job of the offense is to move the ball forward. Did you do everything possible during the course of the multiple offers to move your offer forward? Did you identify the competition and use your offensive line to block their moves? For example, if your offense was aggressive, you may have learned your competition was an all-cash, foreign buyer. Just because your team is playing the Super Bowl champions doesn’t mean you are automatically going to lose. You just have to find the holes in their defense. Sometimes the weakness of an offer from a foreign buyer is they have no connection to the seller. If the seller is an engineer who started his family in the home and you are an engineer with a pregnant wife, you might be able to get control of the ball by playing up that connection.

3.  Defense

Did your defense do everything possible to keep your competition from scoring? Were there any opportunities to force a fumble? For example, your buyer’s agent discovers that the sellers are leaning toward another offer that is very similar to yours in price because the other offer has a smaller loan amount. Your buyer’s agent springs into action and lines up a defensive tackle – using your mortgage broker. Your buyer’s agent immediately gets your mortgage broker on the phone to talk with the sellers and listing agent about your strength as a buyer. I’ve seen buyers win by using this play. It works particularly well if you are using a mortgage broker well known to the listing agent.

4. Quarterback

The reason the quarterback gets most of the attention in football is because he has the most important position on the offensive side. The quarterback knows the plays and is responsible for executing them. In the game of multiple offers, your buyer’s agent is the quarterback. Your agent should be so tuned into the game and the action that they can call an audible and change the play in an instant. For example, you are told the night before offers are due that there is one confirmed offer and two other buyers who may write. The price you offer on the home is based on very little competition. However, the next day when your buyer’s agent is preparing to present your offer, he learns that the sellers have 7 written offers in hand. Because your buyer’s agent is an excellent quarterback, he has rehearsed a backup play with you. He has in his possession another contract that is more competitive, with a higher offer price and fewer contingencies. Did you and your buyer’s agent plan out several plays in order to win? You need to have more than one play in your playbook in order to win when there are multiple offers.

5.  Mindset

In football, there is quite a bit of discussion about mindset. Coaches and commentators understand the ability of mindset to affect the outcome of a game. In real estate, you rarely hear anyone discuss mindset, and yet like professional football, it is a critical ingredient of success. Be very clear on “why” you are making an offer on a home and the benefit it will be to you and your family. If you are thinking about the price rather than the value, you do not have a winning mindset. I’ve noticed a common trait in buyers that lose in multiple offers. They often say, “I want to offer x dollars on this home. I’m not willing to pay any more because that is all the home is worth to me.” As soon as I hear those words, I’m pretty confident they are going to lose. Of course, you have to stay within your financial parameters, but it is important to enter the game of multiple offers with an open mind. If you have a fixed mindset based on the price tag, it is going to be difficult to respond to possibilities as they present themselves during the multiple-offer process.

To win the multiple-offer game, you must have a strong team, skilled quarterback, robust playbook and an indomitable drive to win. Make sure you make good draft choices with your buyer’s agent and mortgage broker, review your plays at halftime, and move in for the win at the end of the game.

 

For more information about how to strengthen your offense and defense see How To Buy The Home You Love In The Bay Area, an expert's guide to winning multiple offers. 

 

 

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Ed Silva, 203-206-0754
Mapleridge Realty, CT 203-206-0754 - Waterbury, CT
Associate Real Estate Broker

Never underestimate the influence of the people standing on the sidelines or on the field and not playing. Sometimes the referees, the other agents, can blow it as well and give their clients some prejudiced or bad advice

Sep 22, 2014 12:09 PM