There is no doubt that the market has picked up in many areas and is moving at a pace that is hard to control and even harder to keep up with in others. In the markets with reduced or limited inventory we are seeing multiple offers and with those come the reality that only one set of buyers will be able to buy the home. Losing a multiple offer leaves many buyers deflated, disappointed, frustrated, and overwhelmed by the fact that they are basically back at the beginning of their home search.
For many buyers this is almost too much to bear and there is a whole host of emotions and stress that goes along with that. Many buyers who have lost a home in a competing offer actually take a break from the home-buying process as the loss of their dream home is too much to bear. However, as interest rates go up and inventory decreases, taking the time to nurse crestfallen buyers back to active buyer status can prove costly to your buying clients. Savvy buyers are being coached by their agents to look at what the cost of a home might be if they wait and interest rates go up while inventory continues to go down. In fact, no agent representing a buyer in a multiple offer situation should ever write that offer until they have had the above discussion to help their buyer see the importance of writing a strong offer.
If you write an offer and lose in a multiple offer situation you may find both yourself and your clients left with a feeling that you have to start over. You can’t help but reflect on all the hours you spent with the buyers searching for homes, showing homes, preparing and negotiating their offer. If the news is not good and your clients have lost the home, there may be a huge amount of disappointment across the board. Your buyers are often devastated and so are you.
So, how do you keep your morale up when all that hard work now has to be repeated? The reality is there are many things that an agent can do for themselves and their clients both before the offer is even written, and also, if bad news is received, to help turn what seems to be a monumental loss into a celebratory win! It all begins with strong communication and the ability to set realistic expectations.
When you are faced with a multiple offer situation, it is critical that you sit down with your buyers and talk about the multiple offer process before you begin talking about the terms of the offer you will be writing and presenting. We all know that while buyers may say they understand that they need to put their best offer forward, you need to stress exactly what that looks like. For example, if they say their best offer is $X, then ask them how they would feel if $X plus $2,000 won the offer. Would they be okay with that or would they have paid the extra $2,000 to get the house? If the buyers answer that they would have gone up to $2,000, then that is what they need to do right now in the offer you are about to write.
It is then critical to explain to buyers that in the event their offer is not accepted they will be continuing their search for a new home. If they really love the home they are about to make the offer on, they need to take an in-depth look at what they will need to do to compete strongly in the multiple offer and win. This often helps get buyers to look realistically at the situation.
Keeping morale up includes both preparing yourself and your client to win, and also being able to provide your clients with a backup plan if they don’t. Having a backup plan and being encouraging and hopeful is critical to keeping the buyers in the right state of mind. Keep your morale up by minimizing the offers you lose and by coaching your clients to win.