Winning a Bidding War Is Harder Than Ever for Buyers

It is a lot harder working for buyers these days. You’d be hard pressed to find a buyer’s agent who hasn’t lost more bidding wars than he has won for his clients. I don’t mind admitting that has certainly been true for me.

Last Sunday, however, I had a big success. My buyer fell in love with a patio home that backed to her alma mater, a Jeffco high school. Like her, the seller was a single woman, so maybe there was some sympathy there — I wouldn’t know.

It’s not accepted nowadays to present “love letters” from buyers, because they could lead to a fair housing violation, but it is okay to say things in a cover message with the contract written by me, not the buyer, so I made a point of saying that my buyer was an alum of that high school and relished buying this house. I don’t know if that helped either, but it didn’t hurt and it didn’t constitute a fair housing violation.

What did help was that I learned from the listing agent that while the seller was moving out of state, she was going to move her furniture to a friend’s house in the greater metro area. We have a moving truck which we make available to our buyers and sellers, but we can also offer it free to another agent’s client if it will help us win a bidding war. That did the trick for my buyer in this situation, and it also saved her several thousand dollars. Here is how and why.

In our offer we added an “additional provision” that Golden Real Estate (not my buyer) would provide totally free moving of the seller’s furniture anywhere in the Front Range, using our own moving truck and personnel, moving boxes and packing material.

Then, instead of a typical “escalation clause” offering to beat any competing offer by one or two thousand dollars (or more), I wrote that “buyer requests the opportunity to match any competing offer in order to retain for the seller the above mentioned totally free moving benefit.”

It worked. We were told the dollar amount of the best competing offer and were allowed to match, not beat, it. My buyer is now happily under contract for her dream home.

Any agent could make the same offer on behalf of his or her buyer, paying for the cost of moving. It’s just that we have the economy of having our own truck and moving personnel.

Since I’m often on the listing side of a bidding war, I have seen other strategies used by agents hoping to win a bidding war for their clients. A common one is to make a quick first offer that is substantially over the asking price but with an early acceptance deadline, hoping to get it under contract before anyone else can submit. This can pose a dilemma for the listing agent when his strategy, like ours, is to wait four days so that every possible buyer gets a change to compete.

Agreeing to accept an early offer like that should be the seller’s decision, however, not mine. Yes I gave my word that we would not sell the home in less than four days, but now I modify that promise by saying that, “in the event the seller wants to accept a particularly attractive early offer, we will give sufficient notice to every agent who has set a showing so that they can accelerate their showing and offering schedule.” We don’t want any buyer or their agent to be blindsided. As we like to say, “the only way a buyer will lose out is if he or she drops out.”

Author: Golden Real Estate, Inc.

Golden Real Estate is a prominent member of the Denver/Jefferson County real estate scene. Based in Golden, we service both Denver and Jeffco, representing both buyers and sellers. We're well known for Broker Jim Smith's weekly "Real Estate Today" column published in the Denver and Jeffco editions of the Denver Post's YourHub section each Thursday. The column also appears in several weekly newspapers and is archived at www.JimSmithColumns.com. We have nine agents, all of whom are Realtors and EcoBrokers. Our office is Net Zero Energy since December 2017, and several of us drive electrics cars. Known for our sustainable practices, we accept polystyrene (aka "Styrofoam") for recycling, keeping 200 cubic yards per year out of area landfills.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s