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Five Ways to Make an Offer Stand Out Dave Anderton
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Five Ways to Make an Offer Stand Out
A surge of home buyers across the Wasatch Front is creating a buying frenzy. How do you make your client’s offer rise to the top? By Dave Anderton
It’s no secret that the Wasatch Front housing market has more buyers than sellers. An influx of out-of-state buyers, combined with Utah’s natural increase, is driving the population skyward. Carlye Webb, an associate broker with Summit Sotheby’s International Realty, recently listed a $290,000 townhome in Herriman City. Within 24 hours, there were 24 offers. The winning offer went for $26,000 above asking price. “Since obtaining my real estate license in 2004, I have never seen a stronger seller’s market,” Webb said. “It can be scary for buyers, which is why it is imperative they are represented by a professional Realtor®.” Most out-of-state buyers arriving in Utah are coming from California. “Even before Covid-19, California’s population growth had slowed considerably,” an article in Cal Matters declared. “From July 2018 to July 2019, California saw a net loss of 197,594 people to other states.” A number of websites, like LeavingTheBayArea.com and LeavingSoCal.com, have popped up to show the financial incentives of saying goodbye to California. The Orange County Register recently ranked Utah as the No. 8 state for the ratio of “ins-to-outs.” Utah receives 191 arrivals from California for every 100 Utahns moving to the Golden State. A surge of home buyers is creating a buying frenzy, as dozens of people compete for the same listing. That means multiple offers are commonplace, especially on homes priced (continued on page 18)
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under $700,000. Here are five ways to make your client’s offer stand out from the crowd.
1. Relationships Matter. Developing a relationship with a listing agent and finding out what the seller wants are crucial, according to Nigel Swaby, a Realtor® with Aubrey and Associates Realty. Agents that know each other are more likely to trust each other. “You want to establish that you are a good communicator,” Swaby said. “If there are details to be worked out, it’s best to call first and then follow-up with emails and texts.” A buyer’s agent should always call a listing agent prior to making an offer and make a call after submitting an offer, Swaby added. “If you do a good job during a transaction, it will be remembered in future transactions when you meet again,” Swaby said. “If you have a bad transaction with somebody, you will not want to do business with them again.”
2. Non-Refundable Earnest Money. Earnest money, the money paid when going under contract, shows how serious you are about buying a house, said Randy Curtis, a Realtor® with Jacobsen Real Estate. Large earnest money deposits tell the seller you are committed to the transaction. In a multiple-offer situation, Curtis recommends an earnest money offer of at least 3 percent of the asking price of a home. “Overall, we are seeing larger earnest money deposits,” said Terrie Lund, sales manager at U.S. Title Agency. In addition, a buyer can make all or a portion of the earnest money non-refundable. “If they are making the earnest money nonrefundable, it makes the offer stronger to the seller,” Lund added. “It shows the seller they are very serious about purchasing the home and they have their financing in line.”
3. Offer More Money or a Short-Term
Lease. For homes priced under $500,000 it is common for offers to start at $15,000 to $30,000 above asking price, according to many Realtors® . However, if the appraisal doesn’t meet the purchase price, buyers may have to make up the difference with cash. Jodie Osofsky, a Realtor® with Signature Real Estate Utah, recently represented a buyer who made an offer that was $100,000 above asking price on a $650,000 home. Fortunately, the home appraised at $750,000. In addition, the buyer offered the seller a 60-day short-term lease back for $1. “The seller was remodeling their new home and didn’t want to be displaced,” Osofsky said. “There were at least three offers higher than my client’s offer. My client was the winning offer because we knew the seller’s needs and were able to accommodate them to stay in the home.”
4. Escalation Clauses. Escalation clauses automatically raise the buyer’s offer by a predetermined amount. Webb said she recently used an escalation clause to help two of her clients make winning offers. However, Webb cautioned that escalation clauses should be worded carefully. She suggested using an attorney for specific language and adding an appraisal clause specifying if the buyer is willing to pay the difference between the purchase price and appraised value, should the appraisal come in lower than the agreed-upon purchase price.
5. Tight Deadlines/Fewer contingencies. In normal times, due diligence typically takes 10-14 days. In today’s market, tight deadlines are more attractive. Offers with due diligence periods of seven days or less are more competitive. Yet, with so many people buying homes, appraisals and underwriting are backed up. Osofsky said she recommends 25 days to complete an appraisal. Contingencies, such as offers subject to sale of a buyer’s home, may put an offer at the bottom of the pile. “It’s a battlefield,” Webb said. “I have not had a single buyer or seller that wasn’t in a multipleoffer situation since March.” But sometimes an offer that is not the highest or best offer wins the day. Webb emphasized that professionalism matters most. “How an agent presents the offer is a big deal,” she said. “Communication skills win offers more than anything.”
Dave Anderton is the communications director of the Salt Lake Board of Realtors® .
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Five Tips for New Agents Born After 9/11
Dear 18-year-old agent, I remember the day I received my real estate license exam results in the mail. It was just a few weeks after I’d turned 18, and as I slid the single piece of paper out of the envelope from the Texas Real Estate Commission, I saw the word “PASS.” I was looking out from my third-floor apartment balcony and felt like I was literally on the top of the world. After working at the Texas Association of Realtors® throughout high school, I was convinced that I would soon be just as rich as I assumed all the Realtors® were who I knew at the time. Now that I’m 45, with full knowledge of what it really takes to make it in this business, I envy the hopeful, newbie energy you no doubt have. I encourage you to hold onto that excitement and hopefulness as long as possible. We can never be certain about the future, except to know that challenges and adversity will come. Last month, I realized that the Sept. 11th attacks on the United States happened 19 years ago. So, if you’re getting your license at the age of 18 as I did, then you’re among the first group of agents who born after our country was attacked. People who are just a few years older than you will have some memory of that time and most can answer the question, “Where were you when the planes hit the towers?” I was seven years into my career at that point and headed out to a property tour, excited to be showing my personal home to fellow agents. I was certain they’d have a buyer for me right away but sadly, no one saw the homes on tour that day. When we heard about the planes hitting (continued on page 18)
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5 Tips for New Agents (continued) the towers on the radio, we all went home and stared at the news in shock for hours on end. All of this got me thinking about how much the industry you are entering seems to have changed since then and how, but when you strip away the noise, the most important factors that contribute to your success are still the same. While you were growing up, not only did real estate pros navigate the uncertainty of the market after the terrorist attacks, we also made it through the dot com bust, several rounds of panic that the internet would disintermediate agents, and the Great Recession. We adapted as advertising and lead generation shifted to online platforms, and as consumers were flooded with more information about real estate than they’d ever need. We learned to incorporate social media and we even adapted to the ways reality TV shows portrayed our work to the average consumer. There’s no doubt the world has changed quite a bit since you were born, but there are five things that haven’t changed, and if you focus on them now, you’ll build a solid foundation to support your career no matter what life throws at you in the future. Here’s what I’d tell myself if I were 18 today and starting my career.
1. Your primary job is to generate leads.
You might think that working with the properties themselves and doing the work to help clients through a transaction is all there is to the job, but that’s an illusion. Don’t get me wrong, that stuff is the reward for doing your job well. But for a minimum of 60 minutes a day, you need to focus on generating leads, which is what results in listing and buyer representation agreements.
2. You must learn how to sell—on the
phone and in person. The world is going to try to convince you that you can text your way into huge commissions. You cannot. People move because of major life changes and that comes with a lot of emotions. Algorithms don’t account for emotions and emojis aren’t how you deal with real human events. So, it’s critical you learn how to sell. Selling is simply leading your clients to a place where they feel comfortable doing what they already know they want to do. Treat salesmanship with as much respect as you might have for accounting, medicine, or law.
3. Use your marketing to drive people
to your database. We say that on Sept.11, 2001, our country was attacked. It’s such a dramatic event in our nation’s history because we normally have absolute control over our homeland. Conversely, our embassies around the world can be overrun at any time, and we know this. In your business, think of your website and your email list (your database) as your homeland. Everything outside of that—especially social media—are your embassies. You could lose control over them at any minute. When you advertise and use these platforms, drive people back to platforms you own—your homeland.
4. Learn the lifetime value of your
relationships. Your database is made up of people who will help you thrive in any market, that is if you remember one thing: People send referrals to you to help themselves, not you. What I mean is, when you get a referral, it’s because the person who sent it thinks you are going to do a good job—and then they get to be the hero for making the connection. To maximize your relationships; it’s not enough to do a “good job” with the referral. You must perform in a way that you have enhanced the reputation and social standing of the person who referred the client to you in the first place.
5. Develop a success-based mindset. This is work that’s going to last a lifetime. Once you make it past the “conquer the world” energy of your 20s, you’ll have a new set of issues crop up that will require you to dig deeper into your personal development. Every decade after that will take you deeper. Don’t worry about this too much right now. Read the book Think and Grow Rich by Napoleon Hill at least once a year and you’ll be as ready as you can be. Now, take these five tips and go conquer the world. Become the top producer I know you can be.
Jasen Edwards is a sought-after sales expert, performance coach, and motivational speaker with more than 25 years of real estate experience. In his production heyday, he was the youngest person ever listed on the Austin Business Journal’s Top 50 agents list and was featured on the cover of REALTOR® Magazine as a member of the 30 Under 30 class of 2002.
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