Getting Your Offer accepted - Negotiating Tips When Representing a Buyer

(Including multiple offer & Coming Soon)

Questions to ask the listing agent before writing an offer - You should NEVER be sending an offer to a list agent you have not spoken to .

Make sure you have a Full Offer Package put together - Include the offer, pre approval (or Proof of funds),with all signed disclosures (ie lead paint, inclusions/exclusions, seller’s statement of property condition). This will show your experience and give the other agent an indication of what is to come working with you. Use THIS Offer Submission Template

1. Are there any other offers on the property currently? - Although the other agent may exaggerate the truth here, you should always know what you are up against and sometimes the listing agent will really show you their cards with this question.

2. Has the property previously been under agreement and fallen apart? If yes, ask why the deal fell apart (ie was a finance issue or inspection issue?). Even if there is no indication in MLS that the property was under agreement ask this question. Sometimes deals are put together and fall apart quickly and were never marked as under agreement in MLS.

What is the Best Closing Date for the sellers? - Ask the listing agent when the sellers ideal closing date would be and try to come as close as you can to that date in your offer. Not every seller wants a quick close.

3. Is there anything else that the buyer could do to strengthen their offer? (i.e maybe they would like to lease the property back for a period of time)

What is important to the Seller? WE want the offer to look like it was written by the listing agent...

4. BIG TICKET ITEMS - If there are big ticket items being included in the sale ie; Above ground pool, shed, playscape, hot tub ex... Verify these items have been paid off or will be paid off prior to closing

When you should be calling the Listing Agent -

1. When showing has been requested - Verify the LA has received your showing request. Take this opportunity to find out more about the house and the sellers situation. This also gives you an opportunity to talk up your client , explain their loan product or any other

2. After the showing - Provide feedback ! Even if you have filled out a feed back form in showing time it is always a good idea to call and explain.

3.When you are writing an offer - You should let the LA know that you will be sending over an offer. Use this call to see if there is anything specific the seller is looking for ex: closing date flexibility, lease back ,items to remain ...

4.When you send the offer - Verify the LA received your client offer.

Here are a list of clauses to consider when writing any of these techniques into your offers

Strengths to point out to the Listing Agent (if they are in your favor)

Your Clients Strengths :

1. How long you have been working with this client? Here you are trying to establish strength of buyer. Ie This a great client of mine, not an internet lead I picked up yesterday.

2. The buyer is NOT a first time home buyer? Repeat buyers are more familiar with the process of buying a home and home ownership and are less likely to get cold feet or back out because of inspection issues.

3. Explain the buyer's motivation to purchase? For example they got transferred out here for a job and need to buy in 30 days or they already sold and closed their house and are living with the in-laws. Knowing the buyer’s motivation level is very important for the listing agent.

4. All decision makers have viewed the property. This just gives the listing agent confidence that a parent or spouse doesn't still need to see the property next week and could potentially kill the deal.

5. How does the buyer get compensated at their job - The ability to underwrite is much easier on straight W-2 employee (vs self employed or commission based) and therefore that buyer is more likely to get financing.

Lender/Loan:

1. Familiarity with the lender - Make sure to point out that this is a local lender that you (or your agency) has done numerous deals with in the past without issues. HAVE THE LENDER CALL THE LIST AGENT TO SHOW THE STRENGTH OF THE BUYER

2. Strength of Preapproval amount - I see some agents ask the lenders for a preapproval for the amount of the purchase price they are offering. The theory here is not to show that your buyer can go higher and therefore tip your hand that the buyer is willing to raise your offer. I would argue the opposite. Have the lender write you the highest preapproval possible (ie 300K even if you are offering 200K). This shows that your buyer will have no problem getting the loan because they are only going for ⅔ of what they are approved for. Agent must feel confident enough to say " My client is approved for x but only willing to pay Y

* Remember Buyers are buying based on a monthly payment not on the house

3. The buyer’s will NOT be asking for closing costs. This should have been indicated on the offer, but might just be nice to reiterate to the listing agent.

4. If the buyers are asking for closing costs, but don't need closing costs make that known. The listing agent wants to know this information in case the house doesn't appraise and you need to lower the purchase price and will no longer be able to pay their closing costs.

5. ALL docs are in - The lender can pre approve the client buy having the majority of the loan underwritten - The buyer has submitted w2, tax returns, bank statements ... and are just waiting on appraisal .

Inspection:

1. Home Inspection experience if they are a first time home buyer. For example they have been through the home inspection process on another house and the only reason we didn't move forward was that there was a major structural issue that sellers were not in a position to fix.

2. Familiarity with the home inspector you will be using - If you will be using a home inspector that you have a good history with let the other agent know that this home inspector is good at explaining any issues that arise without putting fear into the eyes of the buyer.

About you as an agent:

1. Your performance representing buyers - For example, I have obtained 12 accepted offers in the past x months and all of them resulted in successful closings. I have not had a buyer back out of a deal in the last x months

2. Comparable properties to justify your offer - Especially if you are coming in low, provide the other agent with sold comps that you used to complete your offer. This may help them negotiate with their sellers that you offer is a strong offer.

Final Words:

At the end of your conversation with the List the agent you should always tell the agent

" If you choose my buyer's offer I promise to do everything in my power to make this the easiest, smoothest transaction you will do all year! "

** Don’t be afraid to ask the listing agent for an opportunity to match the highest offer. Even though its highest and best situation, ask the other agent if you aren't the highest offer to have an opportunity to match the highest offer when the bidding is done. This is where relationships with other agents can come into play.

“ I know you can’t tell me the other offers, but how does this compare? You think this will be enough to make it happen”

" These buyers are willing to do whatever it takes to get their offer accepted after losing out on a few other offers... We would really appreciate an opportunity for a last at bat"

When Offering on a Coming Soon Listing:

If you are considering offering on a coming soon property, you will probably need to prep the buyer on making a high offer otherwise they will just bring it to market.

When Offering on a FSBO

If you are considering offering on a FSBO, you should get something in writing from the seller on what they are willing to compensate you prior to showing the home. You can then add the following language to the offer to secure your fee “ROVI Homes to be compensated X% of net sales price at closing" and make sure that language makes the purchase and sale.

Be careful with Offer Acceptance

Never tell the buyers their offer is accepted (even if the listing agent has verbally accepted) until the seller signs the offer. The reason being is to avoid a tough situation if another offer comes in between when you tell the buyers you have a deal and the time the seller signs. If an offer comes in during that period the listing agent must present it. If the seller wants to accept this second offer (even though they verbally accepted your offer) they have the right to do so and now you have to call your buyers and give them the bad news.

So what should you say? Just tell the buyer that you think the seller will sign this, but they still haven’t done so.

TIPS :

Sense of urgency on offers if deadline is 5pm have it in at 9am in case you need to make changes have some dialogue about the terms etc
Practice writing an offer with your buyers so they know the process so when it’s go time they aren’t delayed reviewing docs etc
Need to know the market - Set up listing alerts for the agents themselves with all counties they serve set to immediate delivery sf, condo, multi new, reactivated, bom, price change,
Look for properties that have long days on market or are maybe over priced - There might be a little more wiggle room on a property fitting this criteria
Rather than asking for closing costs - Advise your buyer to get a gift from a family member/friend .
In a sellers market - If you have an FHA or VA buyer try to encourage them to try to go conventional - It will be a stronger offer
Look for expired listings and FSBO properties that have similar criteria

Questions to ask the listing agent before writing an offer

Are there any other offers on the property currently? - Although the other agent may exaggerate the truth here, you should always know what you are up against and sometimes the listing agent will really show you their cards with this question.
Has the property previously been under agreement and fallen apart? If yes, ask why the deal fell apart (ie was a finance issue or inspection issue?). Even if there is no indication in MLS that the property was under agreement ask this question. Sometimes deals are put together and fall apart quickly and were never marked as under agreement in mls.
What is the Best Closing Date for the sellers? - Ask the listing agent when the sellers ideal closing date would be and try to come as close as you can to that date in your offer. Not every seller wants a quick close.
Is there anything else that the buyer could do to strengthen their offer? Ie maybe they would like to lease the property back for a period of time
Is there a deadline for offers? Will your clients be reviewing offers as they come in or will you be meeting with them to look over all offers at one time. If there is a deadline for offers, ask if the sellers are reserving the right to accept an offer at any time.

Strengths to point out to the Listing Agent (if they are in your favor)

Make sure you have a Full Offer Package put together - Include the offer, pre approval (or Proof of funds),with all signed disclosures (ie lead paint, inclusions/exclusions, seller’s statement of property condition). This will show your experience and give the other agent an indication of what is to come working with you. Use THIS Offer Submission Template
How long you have been working with this client? Here you are trying to establish strength of buyer. Ie This a great client of mine, not an internet lead I picked up yesterday.
The buyer is NOT a first time home buyer? Repeat buyers are more familiar with the process of buying a home and home ownership and are less likely to get cold feet or back out because of inspection issues.
Explain the buyer's motivation to purchase? For example they got transferred out here for a job and need to buy in 30 days or they already sold and closed their house and are living with the in-laws. Knowing the buyer’s motivation level is very important for the listing agent.
Home Inspection experience if they are a first time home buyer. For example they have been through the home inspection process on another house and the only reason we didn't move forward was that there was a major structural issue that sellers were not in a position to fix.
All decision makers have viewed the property. This just gives the listing agent confidence that a parent or spouse doesn't still need to see the property next week and could potentially kill the deal.
How does the buyer get compensated at their job - The ability to underwrite is much easier on straight W-2 employee (vs self employed or commission based) and therefore that buyer is more likely to get financing.
The buyer’s will NOT be asking for closing costs. This should have been indicated on the offer, but might just be nice to reiterate to the listing agent.
If the buyers are asking for closing costs, but don't need closing costs make that known. The listing agent wants to know this information in case the house doesn't appraise and you need to lower the purchase price and will no longer be able to pay their closing costs.
Familiarity with the lender - Make sure to point out that this is a local lender that you (or your agency) has done numerous deals with in the past without issues.
Strength of Preapproval amount - I see some agents ask the lenders for a preapproval for the amount of the purchase price they are offering. The theory here is not to show that your buyer can go higher and therefore tip your hand that the buyer is willing to raise your offer. I would argue the opposite. Have the lender write you the highest preapproval possible (ie 300K even if you are offering 200K). This shows that your buyer will have no problem getting the loan because they are only going for ⅔ of what they are approved for. Agent must feel confident enough to say " My client is approved for x but only willing to pay Y
Familiarity with the home inspector you will be using - If you will be using a home inspector that you have a good history with let the other agent know that this home inspector is good at explaining any issues that arise without putting fear into the eyes of the buyer.
Your performance representing buyers - For example, I have obtained 12 accepted offers in the past x months and all of them resulted in successful closings. I have not had a buyer back out of a deal in the last x months
Comparable properties to justify your offer - Especially if you are coming in low, provide the other agent with sold comps that you used to complete your offer. This may help them negotiate with their sellers that you offer is a strong offer.
Tell the list agent your WINS " I have had ( 15) x accepted offers in the past (6)x months. I am looking to make this(16) X

At the end of your conversation with the List the agent you should always tell the agent " If you choose my buyer's offer I promise to do everything in my power to make this the easiest, smoothest transaction you will do all year! "

Ways to Strengthen your offer (especially for multiple offer situations):

START BUILDING RAPPORT WITH THE OTHER AGENT FROM THE ONSET (AS EARLY AS SETTING UP THE SHOWING). THERE IS NOTHING MORE IMPORTANT THAT YOU COULD DO FOR YOUR BUYER THAN TO BE IN RAPPORT WITH THE LISTING AGENT. YOU WANT THEM TO FEEL LIKE YOU ARE ON THEIR SIDE AND YOU ARE IN THIS TOGETHER (NOT ITS YOU AGAINST THEM FIGHTING TO GET THE BEST DEAL FOR EACH OTHERS CLIENT)
Use THIS Offer Submission Template
Make sure you put something in additional provisions which references the love you letter or love you video described below so it doesn't get overlooked.
Escalation Clause - This is used to raise your buyers' offer higher than other competing offers. .Consider using an escalation clause without a cap but give the buyer 1 hr to respond to the final counter

Non Refundable Deposit - Since it is so easy for buyers to back out at inspection and get their deposit back, strengthen your offer by making a portion of your deposit (Maybe $500) non refundable to show that your buyers are serious. Your buyers would still have the ability to back out if inspections reveal something unsatisfactory but they would lose the $500 at that point.
Increase Deposit - Your buyer is going to get the deposit back if they back out for inspection or mortgage purposes anyway. Increasing your deposit isn't really that big of a risk for the buyers as long as you watch your dates
Take the property AS-IS with right to inspection - In this scenario you are not waiving your inspection contingency, but in good faith advising that you will not ask for repairs.
Lender to Call Listing agent - Have your lender call the listing agent and confirm strength of buyer.
Waive Inspections Completely - If you are going to go this route make sure you have the buyers sign THIS inspection waiver. Due to state regulations In Massachusetts: a buyer or their representative cannot state that they intend to waive inspections prior to an accepted offer. What you might be able to do is set up a showing prior to making your offer where you bring your contractors in or even bring in a licensed home inspector to do an inspection upfront. Explain to the listing agent your buyer is going to do this so that we can bring an offer without any inspection contingency. You can also opt to waive all inspections except ( maybe a larger ticket item or structural concern) EX: Roof , pool , heating system
Buyer side willing to make FHA or VA Repairs themselves up to $x dollar amount- If you are representing an FHA or VA buyer explain that buyers (or their licensed contractor depending on what needs to be done) are willing to fix any issues that come up. In order to do so you would have to get a Hold Harmless Agreement signed by both parties before making any repairs. In this situation, you should probably put a limit on the amount they are willing to fix that works for the buyers (ie $5,000)
Per Diem Charge - If you are confident that you are going to be able to close on time, add a Per Diem charge for every day past the expected closing date negotiated into the purchase and sale. Ie $50.00. This would only apply if the closing delay is because of the buyer side.
Set Date for Inspections - Inspection contingency should be a set date, not 10 days from Purchase and Sale as the purchase and sale gets held up too often.
Offer a Lease back or Hold Harmless Agreement - Some sellers may appreciate some extra time in their house after closing so they are not rushed moving themselves or their personal property out of the property. If it's ok with your buyers, offer it up.
Take the property with contents - Sometimes removal of all the contents in a property can be a burden for the sellers, especially if they are elderly or its a non owner occupied property. Offering to take the property with contents could really ease the burden on them.
Offer to pay the Seller’s closing costs - This one is a little unconventional, but hey you have to do what you have to do sometimes in a multiple offer situation. Since there is a limit on how much the property will appraise for, one way to put a little extra money in the seller's pocket would be to pay for their closing costs. Make sure you check with the lender to make sure they don't have any issues with this.
If the buyer has a home to sell - Offer to reduce the price by x every x number of weeks. Ie If the sellers don’t have an accepted offer in the next 2 weeks we will reduce the list price by $5,000. We will continue to do this every 2 weeks until the home sells. In this scenario, you may want to put a low end threshold just in case something weird happens in the market (ie sellers are not willing to drop the list price below $200,000 ).
Hail Mary - This isn’t necessarily a way to strengthen your offer, but a way to potentially get it accepted. Here’s our offer but it’s only good for tonight. Tomorrow it goes Down by 5 k or we go after another property

When Offering on a Coming Soon Listing:

If you are considering offering on a coming soon property, you will probably need to prep the buyer on making a high offer otherwise they will just bring it to market.

When Offering on a FSBO

If you are considering offering on a FSBO, you should get something in writing from the seller on what they are willing to compensate you prior to showing the home. You can then add the following language to the offer to secure your fee “Rovi Homes to be compensated X% of net sales price at closing" and make sure that language makes the purchase and sale.

Be careful with Offer Acceptance

So what should you say? Just tell the buyer that you think the seller will sign this, but they still haven’t done so.

TIPS :

Sense of urgency on offers- if deadline is 5pm have it in at 9am in case you need to make changes have some dialogue about the terms etc

Practice writing an offer with your buyers so they know the process so when it’s go time they aren’t delayed reviewing docs etc

Need to know the market - Set up listing alerts for the agents themselves with all counties they serve set to immediate delivery sf, condo, multi new, reactivated, bom, price change,

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