> > > Offer Up, Southeast MI
For the past several years a recurring story we have told
is that inventory remains tight. In 2018 with only 7,711
available listings we were reporting on tight inventory levels
and intense buyer competition. Since the pandemic hit,
inventory levels have been slashed in half. Current active
inventory sits at 3,615, which is only about half as much
of the average of 6,830 we have had over the past 6 years.
Although new listings are trending upward from 2021,
we still have a long way to go to reach somewhat normal
inventory levels. In the meantime, buyers will be forced to
compete for the best listings. Here are 10 strategies to help
you win those prime properties against the competition.
1. Cash Offer—Cash is king and eliminates potential
risks perceived by seller. Not everyone has the
luxury of paying cash, but don’t overlook this
possibility when discussing options with buyers.
2. Escalation Clause—This method is intended to
squeeze out the competition by offering “$xxx”
more than any other offer received. Be sure to
include a ceiling cap, or you may run the risk of the
appraisal coming in short—our next point.
3. Appraisal Waiver or Gap Coverage—If your client has
the financial ability to put more down, the offer might
include language that covers the difference (usually up to
a point) if the appraised value falls short of the sale price.
Be sure buyer and lender are on board with this prior to
making such an offer.
4. Extended/Free Seller Occupancy—With fewer
homes on the market, sellers may need time to find
their next home before they can move. Offering to
extend post-closing occupancy, or letting the seller
stay for free might sweeten the deal.
5. Letter from Buyer to Seller—Building a connection
and making the transaction more about the people
than the money sometimes helps a buyer gain an
advantage. Keep it short, stay positive, and thank
the seller for considering your offer.
6. Larger EMD—Money talks. Increasing the EMD sends the message that your client is committed. It helps reduce the seller’s risk that the transaction will fail.
7. Inspection Waiver—You don’t need to completely waive the inspection if you arrange to have your buyer bring the inspector to a showing. Do an abbreviated inspection so it’s taken care of before making your offer.
8. Increase Down Payment and EMD—larger sums of upfront money may reduce the seller’s perception of risk that your buyer will run into financing issues while completing the transaction.
9. Strong Preapproval—The fewer contingencies in the approval letter the stronger it will be. Approval letters don’t need to match your offer exactly. If your buyer can go significantly higher, it may reduce the perception of letters have more holes than Swiss cheese. Work with your client and their lender to make sure yours doesn’t.
10. Be Likable, Professional, and Easy to Work with—It isn’t always the biggest offer that takes it. Sellers often base their decisions on perceived risk and sometimes it’s because they like that you and your client showed respect when you took your shoes off.
2 minutes For the past several years a recurring story we have told is that inventory remains tight. In 2018 with only 7,711 available listings we were reporting on tight inventory levels [...]
< 1 minute In early 2022, half of all sales are being reported as under contract within 10 days of listing. Nearly 60% of closed sales are selling at or above full list [...]
< 1 minute Recent Rate of Sales: 2021 began with extreme high demand and low inventory. Through the first half of the year, fierce buyer competition created bidding wars and “over-asking” sales that [...]