Negotiation 101 – How To Win A Bidding War When Buying A Home

Negotiation 101 – How To Win A Bidding War When Buying A Home


Hi everybody, your Tampa real estate expert,
Lance Mohr, and we’re talking about how to buy a house. Today, I want to talk about how
to beat other home buyers out if you are in a multiple bid situation. Now when a lot of
you go out and look at homes, especially if it’s a seller’s market, it won’t be too surprising
if you are in a multiple bid situation; you are bidding against other buyers. If it’s
a buyer’s market or a stable market, it’s not going to be as common but it will happen
especially if it’s a really nice home or if it’s a really nice area or if it’s a really
good price. So you need to know what you can do to give yourself an advantage over other
buyers. Now I want to say this, this isn’t going to work on bank owned properties because
banks don’t allow this. They basically do a highest and best, and the same thing with
the relocation companies or other types of REO’s. So we’re basically talking about traditional
sales. So I’m going to give you four things that you could do to crush your competition
if you are in a multiple bid situation. Number one is your agent has to present the offer
and you have to keep that offer clean. So what I mean by clean, don’t cloud it up with
just tons of I want the seller to pay this, I want the seller to pay that. I understand
if you have to the seller pay a certain amount of closing costs, but to start clouding it
up with I want all your window treatments and they are not offering them or if they
don’t offer maybe the washer, dryer and refrigerator, don’t start asking for that. And home warranties,
you could pay for home warranty outside the closing. So don’t cloud the contract, keep
it really clean and you have to have your agent present the offer. I’m not necessarily
saying face-to-face, but over the telephone. I would say probably 50% of all the contracts
I get, I don’t even talk to the agent. It’s sad, but a lot of agents out there, what they’re
doing is, they’re writing the offer up, they are sending over to the listing agent, maybe
myself. I don’t get a phone call from the agent, I don’t get a text that just says “I
sent you a contract”, I don’t get in the email, “Please confirm you’ve received the offer.”
And this is a complete and utter disservice to the buyers. If buyers only knew what went
on, and this is why it is so important to hire the right agent as I said before, and
make sure that agent knows how to negotiate like a pitbull. Because a lot of times – and
you don’t want to hear this, the agent says, “Oh well, you didn’t get the offer.” Well
maybe you didn’t get the offer because they didn’t do all these four things. So make sure
they present it. It’s like going to court, you have to build a case. The last thing I
want to do as a real estate agent is to go out there, show buyers properties for three
hours, eight hours, whatever it is. I mean some agents might do it for 40 or 60 hours.
And then the buyer finds the home they want and we are in a multiple bid situation and
my buyer doesn’t get it. I mean that is just – I do not like that happening, I get extremely
competitive, and the buyer does not like that happening either. So make sure your buyer
presents it and builds a case. Okay, the second thing is have your buyer write a clause in
the contract to escalate the price. This is very important especially if there’s multiple
offers, maybe not just one other offer but two or three or four. Because basically, what’s
going to happen is the sellers are going to basically throw a knife in the room and see
who comes out standing. And a lot of times, it’s not always about price, it may be but
it may not be. So you could have your agent carefully craft a clause to escalate the price
so you could have your cake and eat it too. Now there are some states where this is not
allowed, but if your state does allow this and the agent knows what they’re doing, this
is very, very effective for you winning the multiple bid situation. Next is – I know
this sounds a little unusual, but write a letter to the seller. A lot of times when
people are selling their homes, it’s not just about the money; some people it is, if they
are a business, maybe if it’s in a trust or a flipper or something like that. But a lot
of people, they really want to know who is going to be buying their home. And I’ve had
sellers, and I tell sellers to do this – buyers, write the seller a letter. Tell them hey,
this is what we like about the home, we have so many kids or whatever and just write a
short letter, maybe it’s a paragraph. I’ve seen agents do this, on my listings, every
blue moon they will do something like this and it really, really works. It sounds a little
silly or it may sound a little silly, but it’s very effective. And the last thing, if
you are getting a loan, have the lender, your lender, pick up the phone and call the other
agent. Because the other agent and the seller, they are going to have three questions; is
the buyer ready, willing and able? And a lot of times, having the lender take the first
step in calling the listing agent, this is going to give the listing agent a lot of confidence
in you as a buyer and they are going to pass this on to the seller. So these are four things
you need to do. If you have any questions or anything else you could think of, please
write a comment. If you like the videos, please subscribe and give me a thumbs up. Have a
wonderful day and I hope this helps you.

9 Comments

  • Kimyung Kim

    June 19, 2017

    Thanks Lance!

    Reply
  • MissPrissJewels

    March 13, 2018

    Very helpful. Thank you.

    Reply
  • Audi_ Kid

    March 25, 2018

    Amazing things to learn thank you so much! Will definitely give you a call from California for some help !

    Reply
  • Logan Jones

    April 10, 2018

    When you say highest and best, what do you mean by best because wouldn’t the highest be the best. What makes a bid the best

    Reply
  • Abay Singh

    April 20, 2018

    Can you elaborate on the escalation clause including how to write in the offer. I appreciate the video very much

    Reply
  • RagingTiger

    April 25, 2018

    To escu what the price?

    Reply
  • Giovanna Cruz Fritsch

    July 17, 2018

    Thank you!!!! Amazing tips

    Reply
  • lee family

    July 23, 2018

    Love it…. our agent sucks ass

    Reply
  • C&C Vee

    March 3, 2019

    Is the person that offered first the only one who can escalate?

    Reply

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