When Highest isn’t Best: How to Stay Competitive in a Seller’s Market
Think you need to be the highest offer to close the purchase of your next home? Think again - here is one couple’s story.
Last year we experienced a historical jump in interest rates that pushed many qualified buyers into hiding. This caused our local market to drastically slow down. In the past decade the greater King County area saw double digit appreciation in home prices. When the sudden shock to interest rates occurred economist were predicting a market correction upwards of 15-20%, and more in some regions.
I was hopeful that home prices would come down to give buyers a moment in the marketplace, where they could feel like they were "getting a deal." I can also remember around this same time being horribly disappointed in listing presentation. The market was so hot that real estate professionals were throwing unprepared homes onto the open market at top dollar. There was one home I can remember feeling angry about how poorly it was presented to the market. We had totally lost sight of quality control, and I was disappointed at what was happening. It was challenging to find really well presented homes to present to my buyers.
The market didn’t see nearly the correction that economists had predicted, and it took some real savvy to find and negotiate deals for my buyers.
The Story of One Couple
I remember one couple in particular. They felt stuck in their current home. They loved the general area of where they were but had outgrown this particular house and were ready for something better.
When we found the home they fell in love with, there ended up being an offer review date.
What is an Offer Review Date?
In real estate, an offer review date is a specified deadline set by the seller for potential buyers to submit their offers on a property. This date allows the seller and their agent to collect multiple offers within a set timeframe, providing a fair and transparent process for all interested parties. Once the offer review date passes, the seller and their agent can carefully evaluate each offer and make an informed decision on which one to accept, counter, or reject. This approach can create a more competitive environment, a higher sense of urgency among buyers, and can often result in stronger offers from buyers. Sellers capitalize on this competiveness and are able to review offers in a more streamlined process.
How to Stay Competitive with Offer Review Dates.
Indeed, multiple offers were extended to the seller in my couple’s case. I pride myself on establishing strong relationships with agents in all the locations my clients are home shopping. I make sure to be polite, to communicate, and to share my client's level of interest and be up front and personal. I got my clients in front of the house first and I made sure they received all the information about the home in a timely matter. I ran a market CMA of the area for them to gauge the price and to determine how much they would or could escalate if it came down to that. But it didn't. My buyers and I worked with our lenders to structure a deal that worked for their financial needs but would also be competitive. We submitted a compelling offer that won the deal, and we weren't even the highest offer.
To stay competitive as a buyer on a house with an offer review date, make sure you’re with a real estate agent who:
Prioritizes relationships: winning a deal isn’t all about money. A house sale can be an emotional experience for the sellers, and when you’re with an agent who knows how to build relationships, it gives you an upper hand. The professionalism and warmth of your agent can make or break a deal
Understands how to structure a competitive offer: “Competitive” doesn’t always mean highest. There are multiple factors in an offer, including financing, lenders, closing dates, and more. It’s important your agent know how to craft the BEST offer they can, one that meets your financial goals but is competitive.
Is responsive and timely: Offer review dates put pressure on buyers - there is a hard and fast deadline by which you need to have made all of your decisions. If you call your agent and they don’t pick up right away, or don’t call you back within an hour or two, it’s time to find another agent.
Conclusion
I was thrilled to help this couple purchase their dream home, especially in such a competitive environment. It was a good day. A good transaction, for a good house, with sellers and buyers that had a similar goal.
Ready to work together, or want to learn more? Book your free consult today.