The pandemic has caused a surge in the housing market, and agents must guide clients through the stress of buying and selling homes
By Megan Kramer
COVID-19 has changed the way all Americans work, live and connect with one another.
Many of these changes will be long-term rather than short-lived. For this reason, and because interest rates are low across the country, real estate markets everywhere are seeing a big shift.
People want to move—and they want to move quickly. They’re working from home more and are no longer as tethered to their job locations. With many restaurants, stores and other businesses closed, people also aren’t going out as much and realize they want more from their homes, whether it’s an updated kitchen or space to spend time outside.
“People want to love where they live,” says Ricky Cain, CRS, founder and president of Cain Realty Group, with Keller Williams Realty, in Austin, who has seen the market in central Texas shift since spring from relatively balanced to an extreme sellers’ market. “We’re seeing people who had been renting apartments or renting/owning condos now wanting to rent or own a house because they want more space and more distance from others. And people who own houses are wanting to make a move, too, because they’re home more often and need a space that better suits them.”
Sellers are reaping the benefits from this shift in demand—it’s likely they’ll receive multiple offers on their homes and that they will sell for more than they may have pre-COVID. But while receiving multiple offers seems like a dream scenario for a seller, the actual situation can be quite stressful for sellers, buyers and agents alike. Here are some tips for making the process as smooth as possible.
Prepare your sellers
Dealing with multiple offers can overwhelm sellers, who are already going through an emotional and challenging journey by selling their homes. Make sure you inform them about market conditions and expectations ahead of time, including the possibility of getting strong offers as soon as their home is listed, because even smaller markets are seeing a boom.
For example, Ana Joyner, CRS, owner/broker of Market Leader Realty in Nashville, North Carolina, works a market with a population of about 55,000 people and has seen it become very busy for the last six months. She and her co-owner/broker, Renee Silk, recently dealt with the biggest multiple-offer situation in their 27-year history: 16 showings and 10 offers on a modest brick ranch house within 24 hours.
Buyers Can Get Personal
Love isn’t the only battlefield when a real estate market is ripe with multiple offers, and sometimes you need to add a more personal touch to a bid in order to win. When putting in an offer on a home, have your clients write the sellers a “love note”—a short letter where potential buyers introduce themselves and let the sellers know what they love about their home, and why it’s perfect for them. Of course, not every situation calls for this level of familiarity, so use your best judgment.
With multiple offers becoming more common, Joyner and Silk now inform sellers at listing appointments what they might need to do to prepare for this type of situation.
“We tell them, with the way the market is right now, they may get multiple offers and to expect lots of showings initially,” Joyner says. “Basically, get a hotel room and sit there, because you can’t get into your house!”
Cain also recommends his sellers leave their homes—if possible, for the weekend, or at least between 8 a.m. and 8 p.m. on showing days.
Set a deadline
There’s nothing more frustrating for buyers and their agents than missing a chance to put in an offer, so it’s important to set and communicate an offer deadline to all parties involved.
“A majority of showings happen on a Friday, Saturday and Sunday,” Cain says. “With this market, we want to make sure we list the house late Thursday or Friday morning so that we can then set the expectation with the client and with the agents that we’re going to have the house on the market for those three days, and we’ll review offers on Monday.”
Carl Medford, CRS, CEO of Medford Real Estate Team Inc. in Fremont, California, also has a formula for showings and deadlines. His team typically places a home on the market on Wednesdays, schedules showings over weekends and places the offer deadline on the following Tuesday. “We find that deadlines really help drive offers and get an auction-type environment going,” says Medford.
He adds that sites like Redfin help you easily post offer deadlines on homes that are listed and are receiving multiple offers, so anyone looking at the home on those sites will be informed.
Make offers easily digestible
Many REALTORS® have agreed: Spreadsheets are a great tool for sorting and comparing offers. They are also customizable, so you have as little or as much information as you need in order to present clients with their best options.
“As offers come in, someone on my team is compiling them into a multiple-offers Excel spreadsheet,” says Medford. “It includes information such as price, amount of money down, percent and type of financing—all the key, fundamental points that we need. But it also has one other component that’s important: an appraisal calculator built into it. This helps us see instantly if a given offer is viable.”
Medford’s team insists that buyers provide full verification of funds for their deposit and down payment along with their pre-approval letter. This amount gets factored into the appraisal calculator to ensure they have enough cash on hand to make up the difference if it appraises low.
Spreadsheets are also where you can include information about the people you’re working with, says Cain, because communication, agent capability and other factors can be just as important to an offer as the numbers.
“We have a notes section where we include information pertaining to our conversations with the lender or the bank, as well as the agent,” he says. Cain’s team notes things like whether they were able to get hold of the lender, bank or agent in a timely manner, if questions were answered to their satisfaction and if they’ve worked with an agent previously.
Be the expert your clients need
While sellers are the final decision-makers, they will be looking to you to recommend the best offers. It’s up to you to know all of the facts and to interpret them to help clients understand the offers that will best meet their needs.
“The highest price is not always the best offer,” Joyner says. “You have to look at all the terms before you respond to an offer. Every page of that contract has to be looked at and examined to make sure it works.”
And when you’re representing buyers, Cain recommends keeping a cool head. “When you’re having communication with an agent, you should be doing it with the utmost level of professionalism so that your clients have the best opportunity to have their offer accepted,” he says. “Agents [and sellers] don’t want to work with someone they think isn’t going to get to the finish line. So, when you’re communicating in a multiple-offer situation, do it with respect, do it with professionalism and be the agent that someone wants to work with.”
Backup Offers
When working with buyers, particularly when you know you may be heading into a multiple-offer situation, it’s important to discuss backup offers with them. Backup offers are helpful when a buyer’s initial offer isn’t accepted—in case the offer the seller did accept falls through, your client’s backup offer could now have them first in line for the home, avoiding even more competing bids.
Be sure to discuss the details of the backup offer with your clients, including how long the offer should remain in play, and keep in contact with the selling agent, so you’re not waiting around longer than necessary. And, of course, keep showing your client’s home until the backup offer is accepted!
When communicating with an agent, do it with a high level of professionalism. To read more about professionalism, see Rising Above.
Photo: iStock.com/Planet Flem
