“Holy cow! Not another bidding war that I lost! This is the third property that my client has lost out on.”
How often do we in management hear this woeful cry on Monday morning after a busy weekend?
Back in the day, a multiple offer was a rarity. Today, in Vancouver and Toronto, there can be up to a dozen offers on a property. Some of the end prices do not make any sense at all. A prime example was a two-storey tear-down that ended up with over 35 offers. It will be torn down to build a 4,000 sq. ft. monster home.
There are many more examples of frustrating stories where our buyers walk away bitter and disillusioned.
There’s no remedy, of course, for the unsuccessful buyer for that one great home that they’ve laboriously selected with their agent. Or is there?
Let me put on my coaching hat. Here’s a marketing approach for you to clone after an unsuccessful offer presentation.
Take the defeated offer and place it in folder (I like using the red colour; it makes the file look really important). Be sure to black out price, terms, conditions and buyers’ name.
Approach each home that’s similar to the one you’ve been shot down at and use a script somewhat like this (but first, be sure to ask if the seller has any form of contractual agreement in place with a real estate professional).
Introduce yourself and say, “I was involved in an offer on… that wasn’t accepted. I was wondering, since your home is somewhat like the one up the street, if you’d be interested in a simple agreement to sell your home, without tying it up on the MLS or on exclusive?”
The seller will have his curiosity peaked. “How is that possible?”
“Mr. Seller, the province has developed an agreement to accommodate this novel selling service. It’s called ‘commission agreement’ to sell a property not listed for sale.”
Note that this method is only workable if the sellers are ready to move at the same time as your client is looking to move. The one we use here in Ontario has terms and conditions that are not too dissimilar to a regular listing agreement.
So let me continue with what I believe is a win-win result.
If the seller agrees to sit down and talk, proceed with, “If we could sell your lovely home, which is much like the one we lost out on, when could you move? We need an xx day closing. Will that work for you?”
The seller may say, “Sure, but where would we move to?”
Here’s where you move on to telling them that you will find a dream home for them in that time and you will put in the Agreement of Purchase and Sale that the sale would be conditional on that.
For your commission, it usually makes sense to ask for what you get when you have a buyers’ agreement.
How do you notify the public of a “sold” on the property? Use a sign with a stick-on that says “sold under contract”. You still have to have a data sheet on the property and explain all that’s normally required.
I’ve trained many, many agents on this technique. It enhances your chances of adding to your data bank and to your own financial bank.
Here’s a true story to conclude with:
About 2001 or 2002, an aspiring agent who came from an entertainment industry had more than 20,000 names in his data bank. One of them called and asked him to find a home in a very tony neighbourhood and I offered to help him out. All he had to do was draft the offer and come along with me once he found the property of his client’s choice. We did this, but we lost out to a higher offer.
He was devastated because it was his first offer. How many of us have felt that way?
I gave him the suggestion above and the following day he called on at least two dozen homes. The last one he approached answered the door. It was a young man, about 19, who was living with his dad. The mother had died of cancer the year before and they wanted to have a smaller property, preferably a two-bedroom condo. The sales rep made the deal and since then used that sales technique successfully for several years. He is now a competing broker/manager.
As long as listings remain tight, this insanity of gazillions of offers on properties will continue.