One of the most important things you’ll do as a buyer’s agent is protect your client’s interests throughout the home search and purchase process. In fact, you may have wanted to become a buyer’s agent because you get a lot of satisfaction and enjoyment out of helping other people accomplish their goals. In this case, your client’s ultimate goal is to get the best deal possible on a home of choice.
The real estate market fluctuates and goes through cycles that are influenced by various factors, including the economy. For instance, right now, there’s a lack of inventory, meaning that there are more people looking to buy a home than there are people who have listed homes for sale. This makes for a competitive buyer’s market, and you must be prepared to help your client win a bidding war if multiple offers are made on the home that he or she wants to purchase.
Of course, the best way to become a successful buyer’s agent is to lay a solid foundation of knowledge, mentorship and practice from the start. It’s wise to make good use of your time in real estate school, speaking with experienced agents and instructors and using roleplay and other practice tools to get used to interacting with clients. Once you’re ready to get your feet wet, there are a few things to keep in mind when your client’s offer isn’t the only one on the table.
Set the bar from the start regarding price
If your client plans to make an offer on a house that multiple other prospective buyers are putting bids on, you’ll want to begin by having a thorough discussion about price. The seller, of course, has listed the house for a certain price; however, most sellers understand the importance of being willing to negotiate if a solid offer is made that happens to be less than the asking price of the home.
It’s logical to assume that a seller is going to want to make as much profit as possible on the transaction. While you can’t say with 100% certainty that the highest bid is going to win the deal, it’s important for your client to submit a credible offer. It helps to discuss ahead of time what the highest price is that he or she is willing pay. From there, you can talk about whether to offer that price right off the bat or to start lower and raise it as necessary.
Why would a seller accept a lower offer?
The primary issue in buying and selling homes is, of course, money. As mentioned earlier, however, there’s no guarantee that your client will win a bidding war simply by making the highest offer. This is because other factors often come into play, such as contingencies.
If your client’s offer is less than several others who have submitted bids but has zero contingencies, the seller might decide to go with your client to save himself or herself a hassle. In other words, if a lower offer is more of a stress-free offer because there are no contingencies, it might wind up being the most attractive offer in the seller’s eyes.
Make sure your client gets pre-approved for a mortgage loan
As a buyer’s agent, you want to help your client have the smoothest home-purchase experience possible. In all cases, but especially in a bidding war, prospective buyers who are pre-approved for a mortgage loan have an edge over those who have not secured approval.
If a seller receives numerous offers, one of the first things he or she is likely to note is whether any of the prospective buyers are pre-approved for a mortgage. If your buyer acts on your recommendation to get pre-approved and submits a credible offer keeping the other pertinent issues in mind, there’s a good chance that he or she will come out on top.