Certainty of Execution-What Matters most to buyers and Sellers?
The real estate landscape has made many unique changes during the challenging year we all know as 2020. Spring time is supposed to be the hottest time in the market. Everyone is supposed to be on vacation or away for the summer months. Most years see an increase in activity during the fall that coincides with the fresh start of another school year. Winter is, well, cold. 2020 has flipped this typical schedule on its head in only a few short months and we’re only half way there. These unprecedented circumstances have had an impact on the psychology of buyers and sellers resulting in a shift of importance. What a buyer perceives as the most desirable aspect of an offer, may be less of a concern to the seller. Accent Realty got 9 properties under agreement in just the past few weeks, and in half of them the seller did not accept the highest priced offer on the table. I want to break down both sides of home buying and selling based on observation over the past few weeks. What are we seeing that matters most to the sellers? How can a buyer’s offer stand out on a hot property to avoid a bidding war? Let’s take a look. BUYERS-Making your Offer Shine: If you are a first-time home buyer or a seasoned investor, the process of putting in an offer on a home is the same, however, every offer will have its own style and reflect the agent or individual composing said documents. An effective agent will know how to blend the right mix of resources to achieve your goal of having your offer accepted. Knowing what buyers are looking for or hold in high esteem allows an agent to shape the offer to cater to those needs. Of course, nothing is done behind the buyers back. Our job is to assess and explain the risk, provide expert guidance, and execute buyers’ instructions. This becomes exceedingly more difficult in the absence of strong communication. The relationship between client and agent needs transparency, cooperation and above all trust. You are making a six or seven figured purchase so make sure that the agent working for you has your best interests ahead of their own financial gain. The “shine” part of your offer is what exceptional agents thrive on. When sellers’ agents are reviewing offers with their clients keep in mind that optics matter. An offer packet that is presented organized with personal attributes reflecting the buyers as more than just a number, can have a considerable positive impact. Granted, a personal letter is not necessarily going to save you $50 or $100K. Which is why there are multiple levers that can be applied in the right situation to make your offer stand out. Larger initial deposit checks, quicker dates to the closing, escalation clauses, and waiving contingencies are only a few additional ways to make your offer shine, however, each of these actions is not without some degree of risk. When considering making an offer on a home, the buyer needs to ask themselves a few questions:
Can I afford this home?
How much do I want this home?
What risks am I comfortable with to get my offer accepted?
No one wants to over pay, but if you answered the above questions: “Yes”, “Very much so” and “pull out all the stops” the right agent should be able to put you in the best position to be a contender during the offer process and deliver a high success rate. SELLERS-Certainty of Execution Someone looking to sell their home must also make critical decisions based on what is most important to them. Historically, most people want to sell their home quickly and receive as much money as possible for it and in many cases, today is no different. Unlike a buyer, sellers must go through several weeks of preparation work before they bring their property to the market. This includes gathering documents, decluttering the home, possibly making minor repairs and fixes (of course each property is different and will have its own set of needs). Before any of the labor intense work starts, most home owners will select an agent to represent them. Some sellers want to interview half a dozen agents who specialize in the area, others will shop the internet for the best reviews, and some go at it without an agent all together (For Sale By Owner-FSBO). Selling your home with out an agent can be done, however, it can limit the exposure and increase the amount of work and stress involved. I encourage sellers to seek out an agent that provides transparency, responsiveness, and again trust. You are hiring someone to work for you and should feel comfortable they are providing the type of service you’re expecting. Having made the right selection, your agent should know the impact and changes that have been forced on our industry. Safety is at the top of the list when it comes to showing homes to potential buyers. The best agents have now adopted Matterport or 3-D tours to do the initial showing like the one below: https://my.matterport.com/show/?m=32ZXcAVi8Vq&mls=1 As professional as this is, justifying spending this kind of money before setting foot in the home is a leap even the savviest buyers have a hard time with. Packed open houses with leisurely “come and go as you please” attendance has been a thing of the past since the start of Covid-19 here in the states. These activities have been replaced with structured 15-20-minute viewings and buyers have been handed a wealth of knowledge about the property prior to their visit so long as the listing agent has provided the seller with the best advice and tools to do so. Now the offers start rolling in. Speaking from experience over the past few weeks, sellers have been valuing the certainty of execution over the highest offer price. This means the seller who has done the appropriate preparation stands the best chance of their property only seeing 1 weekend on the market and minimizing or eliminating their involved risk. We have seen buyers waiving mortgage contingencies to signal to the sellers their commitment level to absorbing that risk and presenting offers as clean as they come. The highest number is not always the winner when sellers favor a buyer with an organized offer demonstrating their willingness to take the extra step of assuming the majority of that risk.
In the end it comes down to a combination of want from the client and competence of the agent. When the buyer has decided they want the home, or the seller has decided what they value most in results, it becomes my job to advocate on their behalf.