By David Knox | August 2021 | Blog Topics
After all your work helping buyers find a home and become ready to make an offer, they turn to you and ask: “How much should we offer?”
Given the low interest rates and shortage of inventory, buyers are scrambling to not only find a home, but to successfully purchase one. If you are representing buyers in this market, you share those challenges with them. It is likely that after weeks of searching and days of negotiating, you’ll end up with an unhappy buyer and no commission.
If you’re a member of David Knox Real Estate Training, watch: QT61 Buy in a Seller’s Market or Wait? Fill out the form below if you’re interested in learning more.
Before you begin your journey with buyers, remember two key words: Motivation and Expectation. Be sure they are really motivated to buy, buy now and buy now from you. They must have a sincere desire to get into their next home.
Then you must manage their expectations by painting a realistic picture of the challenges of finding a home, negotiating a purchase and paying much more in price. But also share the good news of a very low interest rate returning rewards for years to come.
So the moment of finding that home and realize they will be in a multiple offer situation, they ask your advice on the offer amount. Do NOT give a specific number to offer. If it sells for less, they’ll blame you for leaving money on the table. If it sells for more, they’ll blame you for losing the house by not offering more. You do not want them saying “Hey, we would’ve gone that high!”
So instead, tell them to offer a no-regret price. Suggest that they offer an amount that if they lose the house, they’ll not wish they’d offered more. Say: “Mr. and Mrs. Buyer, I will not make the offer price decision for you. That is your choice. But as a guideline, I suggest that you offer an amount with which you feel comfortable, yet will not regret losing the home if it sells for more.”
Tell them to offer a no-regret price. Suggest that they offer an amount that if they lose the house, they’ll not wish they’d offered more.
Also coach them on “leaving money on the table.” It is probable that their offer was more than the second place offer. Treat the difference as insurance to be sure they secured the home. Let go, no regrets.
You’ve left them to be responsible for their choice and you can move on with either closing this transaction or finding them another home.