WHAT IF? Essential words when working with buyers to write an offer | The Zebra Blog

WHAT IF? Essential words when working with buyers to write an offer

Four people in discussion

Over the next several weeks I am going to be covering the importance of two little words: “What if?”

Simply asking this question in a variety of scenarios will not only help you gauge what your clients are truly feeling about an issue, but it can also be a good tool for your clients to realize just how strongly – or not – they feel about an issue.

For example, let’s say your buyers have found their dream home and they are ready to make an offer. You should be ecstatic for them and excited to be a part of helping them to get their new home. Instead you are concerned that they may not be willing to do what it is going to take to make this home theirs, as many buyers are unrealistic about what it takes to win in a competitive, low-inventory market.      

Have you ever sat down with a buyer to write an offer and they tell you that they want to offer much less than the purchase price? Or, even worse, they tell you that they want you to work your magic and do whatever you can to get them the house. The challenge with this kind of expectation is that it is not realistic, and if you don’t explain this to the buyer you are setting them up for a big fall if they do not succeed in getting their dream home. The buyer may even blame you and decide to work with someone else.

Before putting pen to paper, it is important to have the “what if” discussion, whether it is a buyer going in with a low-ball offer, or a buyer needing to compete in a market with tight inventory. For example, in a multiple offer situation, if you don’t feel like the buyer is doing all they can to win the offer… ask the question, “What if you lose the home because someone else outbids you?”

Then be still and wait for their answer. If they say, “That’s okay; we will just find another house,” present the “what if” question again. You might ask, “What if there isn’t a better house out there than this one?”

By asking a “what if” question you are helping the buyer see the possible reality and consequences of not making a good decision up front. Some buyers might say, “If I don’t get the home I guess it just wasn’t meant to be.” Ah! This is a great time to ask a series of “what if” questions:

  • What if it was meant to be, but at a more competitive price?”
  • What if we can’t find another home like this one and the interest rates go up?”
  • What if we can’t find another home as close to your school/work as you wanted?”
  • What if we continue to see inventory decline and prices go up?”

Asking “what if” helps you engage with your client and allows them to tap into how they really would feel if they lost the house. It provides a reality check for your buyers to consider doing what it takes to put their best offer forward right up front. And it helps buyers see things from a broader perspective.

Remember, your job is to help your buyer win the offer; including being open and discussing all the pitfalls of not being competitive. If you find yourself working with an unrealistic buyer, make sure you take the time to discuss all the possible “what ifs” with them and help them make a great decision.

 

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4 Responses to “WHAT IF? Essential words when working with buyers to write an offer”

  1. Good points on the what ifs, Denise. I like your follow up what ifs.

    Another way I put this to buyers is this: at what point will you cry if you do not get this home? I don’t want you to wish you had gone a littl bit more if you could have done that and lose it. Where will you cry or where will you say it is okay?

    Maggie

  2. What if questions are a great way to get the buyer thinking about what they really want.I think it is also very important to explain the market to them so they really understand what it is going to take to get an offer accepted.The sale ratio and absorption rate are two effective ways to explain the market to your buyers or sellers.

    The sale ratio tells them who the market favors and by how much, If the market strongly favors the seller the buyer will most likely be in volved in multiple offers and must be prepared to compete for the small supply of homes. If the sales ratio strongly favors the buyer then the buyer should expect to be able to negotiate a lower price ,closing costs and so on.

    The absorption rate quickly tells you how many houses are selling/month. If only one or two homes are selling per month and you have 15 houses on the market, you have way over a years supply of homes on the market. It is easy to show a seller he had better take your offer.What I like about the absorption rate is it brings clarity to seller on what they must do in order to get their home sold. If only two or three homes are selling /month then the seller has to be one of the top 2 or 3 best deals on the market The absorption rate also will tell you the listing to price ratio which tells you what sellers on average are getting for their homes. If they are getting on average 94% of their listng price then it is easy to show your offer at 95% is a good deal relative to the market.

    I have to thank Denise for the sale ratio method – it has been very heplful in explaining the local real estate market and prepares the both buyers and sellers to make the correct decisons based on current market conditions.

    • Denise Lones says:

      Bill- You made my morning, thank you for passing it on! Agents who haven’t made sales ratios and absorption rates a part of their buyer/seller education really should give it a try. Best -Denise

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