In very hot markets it may turn out that even n though you act as quickly as you can, other buyers are doing the same thing. Thus, suddenly you find that there are multiple offers on the very same item you have your sights set on. If that happens, what should you do? Here is some valuable advice for negotiating in a hot market.
Act Quickly: It’s the early bird that gets the worm in a hot market. Often if your offer gets there before others, particularly if you’re a day or more ahead, and have the financing all arranged, the seller may accept it. Wait and competing offers may come in, some better than yours.
Show That You’re the Better Buyer: Use a preapproval letter specifically designed for your offer.
Writer A Letter To The Seller: Used increasingly in bidding situations, the buyers explain why they should get the item. If you use this tool, don’t whine and complain. Talk about the positive aspects and paint a bigger picture for the seller to put you at the top of their consideration. Don’t get too mushy, but try to win over the seller’s sympathy. Maybe they’ll pick your offer over a better offer simply because they like you.
Jump The Price: If warranted by market values, make your bid significantly higher than the competition. This tactic tends to freeze out the competition who suddenly see you as a “big roller” against whom they can’t compete. Just remember not to go over the market value.
Insist That Your Offer Be Presented In Person: In hot markets, offers tend to simply be faxed or emailed over. This doesn’t do you any good. Insisting that you present the offer in person makes an impression on the sellers. This leaves a door open for rapid fire negotiating at the table that can be sealed with a handshake.
Try A Deadline: When there are multiple offers, sellers will often sit back and take their time deciding, hoping that even more and better offers will arrive. Make your offer the best one and insist the seller give you a “yea” or “nay” immediately. If the seller refuses, consider moving on.
Locate The “Lost” Seller: In some markets, your agent will explain that your offer can’t be presented because the seller is “out of town and unavailable”. Some sellers will list and leave”, coming back a week or two later to, hopefully, a bunch of offers. The truth is that anyone on this planet can be reached in a few hours by multiple means of communication…unless they don’t want to be reached. If that’s the case, then look for another deal because you have no seller to work with.
The bottomline is: in a hot market, knowledge is king. Know what your desired item is worth, and negotiate for all you’re worth!
Gregory Patton is a sales manager with Rockville Centre Apartments, who has held seminars discussing the art of negotiaing with sales teams from around the country, and has won multiple awards for his lectures in negotiations practice.
How To Win A Bidding War
