Its a seller's market. I'm sure you've heard. It is not just in Portland, it is across most markets. COVID times have generated a severe shortage in inventory. Home owners are staying put, and buyers want to take advantage of low interest rates and get into a home with extra room for working from home. Well perhaps is not that simple, and I don't want to make light of how many people have faced serious challenges this past year, but the bottom line is we have very few homes to sell and too many buyers waiting in line. That creates a simple scenario that is really complicated to navigate: multiple offers on almost every home that hits the market. It is not uncommon to see 10+ offers on a single house, and winning offers that are $100k or more over the asking price. A well staged and cared for home will not last more than a few days on the market, and open houses are a zoo.
But here is a secret: any agent worth their salt should know how to make your offer stand out without having to keep throwing money at the sellers. Every buyer in this market needs a GREAT agent to WIN. Unfortunately, not every agent is created equal and a great agent doesn't just appear with a quick pressing of a Zillow or Redfin button. It is important to ask people you trust for referrals, and to do your research and conduct interviews until you feel confident you found a great agent.
How do you know you found a great agent?
Great agents love their job. They love talking about it, and they are excited about it, They answer their phone and respond promptly to messages. They are available nights and weekend for you if necessary. They understand time is of the essence in this market, and they work FAST. When a client sends me a listing I know will be popular and sell fast at 4pm on a Sunday, I am immediately making an appointment for 5pm (or making sure someone in my brokerage can cover for me if I absolutely cant make it. It's a team effort at Wildwood and one of the top 3 reasons I chose this brokerage!).
Great agents are knowledgeable and don't mind taking the time to explain the home buying process to their clients. They want you to understand everything. They want you to feel confident. They know the sales contracts in and out, and can explain every single contingency that protects you, the buyer, as well as all the timelines, and terms. This will be crucial when it comes time to write an offer and perhaps have discussions about modifying contingencies to entice the seller (more on that later!). I pride myself in going over every document with my clients, and making sure they understand the process. I craft personalized timelines for each transaction so we never miss a deadline, and we know what comes next, every step of the way.
Great agents care about you and get to know you, so they can better serve you. My favorite part of being a real estate broker is getting to know people in this very emotional and important process of finding a home. I believe that developing and nurturing strong and honest client relationships is the foundation of a successful real estate outcome.
Great agents make sure you are prepared for the competition. In this market you want to be pre-approved and be working with a great lender. A great agent will communicate with your lender and make sure to have access to pre-approval letters in case you are ready to write an offer on a Saturday night. They will make sure they know how quickly a lender can close a transaction, and if you choose wisely, your agent should be able to ask the lender for videos or calls to listing agents to help assure the sellers that you are a committed and qualified buyer. In my practice, I work with some fabulous and reliable lenders that take care of my clients as much as I do and will answer my calls and requests any time, any day. This has proven crucial for my clients. When listing agents get a call from my clients' lender, they are assured the lender has taken care to approve my clients and that they can count on a smooth transaction as well as professional and honest dealings.
Great agents are not shy. They will know how and when to open the line of communication with the seller's listing agent and ask the right questions. They will assess the competition, and learn about what is important to the seller when looking at offers. When clients ask me if they should write a personal letter to the seller, for example, I always say "it depends". I have do my research, Who is the seller? Do they still live in the home? Or is it an investor? A flipper? Is the seller even accepting letters? Whether a letter will be compelling will depend on the seller. Does the seller need the cash from the sale to move? Would a free rent-back period be beneficial? Does the seller have a budget for repairs? Perhaps an as-is offer would be most important if he doesn't. A great agent is a great communicator, and can effectively gather information on your behalf.
Great agents are friendly, smart and easy to get along with. Thats right. You want an agent whom other agents like. Agents who have a solid reputation of being cooperative and good at their job among their peers have a big advantage because it means the listing agent can confidently convey to the sellers that the transaction is likely to move swiftly, and that the buyers will be well educated by their agent, and are therefore more likely to follow through with the terms of the offer and close the transaction. I pride myself on having great rapport and communication with other agents, and will provide references of other agents I have worked with to the seller's listing agent if it will be our fist transaction together!
Great agents know how to write and present an offer. I love helping my clients shine above the rest. I am prepared when asked questions about the clients lender and the type of loan they are applying for, and I know how to represent my buyers commitment and capability to CLOSE THE DEAL. In a recent multiple offer situation, the listing agent called me and said "it was your offer presentation, the way you talked about your clients, the information you provided about their lender and your top notch communication what won your clients the deal!" IT MATTERS.
Great agents know the market you are shopping in inside and out. They also know other agents selling in those areas, know what homes went under contract this week and how long they were on the market, and is clear on what the home values are. If I am not familiar with an area, I will find you someone who is. I will do everything I can to better serve YOU.
Great agents know how to sweeten the deal without putting you, the buyer, at risk, or just recommending you offer more and more money. I can't give away all my secrets on a blog post, but a great agent should be able to go through some contract terms that can be enticing to sellers and assess if they are something that you can do in your specific situation. For example:
Offering a bigger amount of Earnest Money (EM). EM is in essence a security deposit that demonstrates the buyers are serious and willing to demonstrate an earnest of good faith about purchasing the property. If you don't perform, you risk loosing this deposit. EM is protected by certain contingencies, or conditions, in the contract. A great agent will protect your EM by staying on top of all these conditions and timelines, while offering more money shows the seller your are willing to risk a lot for the property, and therefore how committed to it you are. Releasing the EM after certain contingencies have been met can also be an effective way to show commitment.
Bridging the gap if appraisal comes in low.. An appraisal is the estimated value of a property based on an inspection conducted by an appraiser as well as how the property compares to recently sold homes in the area. Typically, lenders will only loan you a certain percentage of the appraised value. If you are providing 10% down payment on a deal and the property appraises at 500K, the lender will loan you 90% of 500K, regardless of how much you offered to pay. If you offered $525K, you may need to bring the extra 25k to closing or renegotiate the price and ask the seller to lower the price to 500K. This is no good for the seller right? Perhaps it would be possible to for you write on your offer that you agree to bring extra cash to closing to bridge any possible gap in appraisal up to a certain amount. For example, a property is listed at $400k, and in order to compete, you have to offer 25k over asking. Your agent knows similar homes in the area have been appraising for just shy over 400K consistently, he or she may advice you to offer a 20K appraisal gap if you can afford it. Make sense?
Not asking for repairs under a set amount, or taking the house as is. Depending on the home, and the situation, this may be a smart strategy, as long as you are still protected by your inspection contingency period. I often discuss with my buyers how much money they are willing to spend on repairs. After all it is a used house! We may determine together that you don't need the seller to pay for any repairs for which the repair estimate is less than $2,000.00, for example. You are telling the seller up front you will take care of those yourself
Great agents know what the buyer should NOT ask for in a competitive market. That super rad custom made hot tub? No way. Closing costs? FORGET IT.
Finally, Great agents put a stop to crazy offer terms that could represent a risk to you immediately and/or after you own the home, such as full inspection waivers. YOU DO NOT HAVE TO WAIVE ALL YOUR CONTINGENCIES, WHICH ARE YOUR PROTECTIONS, TO GET THE DEAL. This is not in your best interest and I would never advise you to do it.
"What I want is for you to get the house you want, feeling confident that you were informed and protected every step of the way. I want to be YOUR great agent, and get you packing and unpacking". - The PDX House Fairy
