There are a lot of things real estate agents think about when getting started in real estate. In fact, it can feel a little daunting. But don’t worry, we’re here to help. We put together this cheat sheet of the steps you need to take to get your real estate business off the ground.
So whether you’re just starting out or you’ve been at it for a while and could use a refresher, read on for the essential information. We’re sharing these tactical steps to winning real estate to help you!
We know that when it comes to getting into real estate, there’s a lot of information out there and it can be hard to know where to start. That’s why we’ve created this guide – to help you every step of the way as you begin your journey as a real estate agent in this exciting industry.
Step 1: Keep your Offer Clean and Simple.
The winning offer in a real estate deal is the one that is clean and simple. While adding special provisions or conditions to your offer may be tempting, doing so can often make the deal more complicated and less likely to close, and an experienced real estate agent avoids going that way.
For example, if you’re buying a house that needs some repairs, you might be tempted to include a contingency. It allows you to back out of the deal if the repairs become more expensive than expected and are having a significant impact on the asking price.
However, including this contingency would make your offer less attractive to the seller, who would prefer a more straightforward deal. When it comes to real estate deals, it’s best to keep your offer clean and simple as many other real estate agents do.
In recent years, more details have appeared in contracting than ever before. Unfortunately, the practice of adding details to contracts could prevent the offer from being evaluated. This undermines several factors like purchase price, closing costs, contract price, and sales price.
When a buyer reviews a contract, listing agents seek out signs that demonstrate the competence or flexibility of the other agent. When buyers paste the boilerplate text into blank fields, the seller is aware that they can have difficulty working with it.
The addition of words to the contract also gives attorneys broader legal leverage in litigation if the case is filed. Several agents can fill contracts with useless words that aren’t needed there.
Step 2: Use a Reliable Local Mortgage Lender.
Real estate transactions are notoriously complex, so it’s important to work with a local mortgage lender who can guide you through the process. Look for a lender who is experienced in handling real estate transactions in your area and has a good reputation.
Ask around for recommendations from friends, family, and real estate professionals. Once you’ve found a few potential lenders, compare their offers to find the best deal.
Be sure to read the fine print carefully before signing any paperwork. With a little research, you can find a reliable local mortgage lender who will help make your real estate transaction go smoothly.
There are many national companies that offer online services, but working with a local lender has several advantages.
First, you’ll be able to meet face-to-face to discuss your loan options. This is important because buying a home can be complex, and you’ll want to make sure you understand all the details of your loan.
Second, a local lender will be familiar with the real estate market in your area, which can help you get the best deal on your home.
Finally, working with a local lender supports the community where you live. So when you’re ready to buy a home, be sure to choose a reliable local mortgage lender.
If a listing agent is given offers from a prospective purchaser, it will verify its lending institution and approval letter. If the listing agent is an experienced seller, the seller can identify several local lenders.
Certain lenders are known to get bad publicity from the saboteurs of transactions. If you use one of the lenders, the seller may give this information out.
When you work with a professional agent, ask them to suggest a lender that will accept your mortgage. In smaller cities, such factors are crucial when offering. Realtor professionals generally see themselves in smaller cities.
Step 3: Position Yourself to be Flexible.
In order to be successful in real estate, it is important to be flexible and adaptable. After all, real estate can be a volatile and fast-moving industry, so you need to be prepared for anything.
Position yourself for flexibility. This means building a network of reliable contacts, being aware of the latest trends and developments in the market, and developing a solid understanding of the local real estate market.
With these tools in your arsenal, you will be able to respond quickly and effectively to changing conditions as they arise.
Each seller is unique in their own case. If you are positioned quickly to meet customer demand, you’re more likely to win over competitors.
Sometimes, it is necessary to create an alternative way to buy a house in this competitive market. Sellers of properties with multiple sale offers won’t accept contracts until they sell a new home. Generally, sellers seek as little contingency or delay as possible in real estate transactions.
A backup plan is to be able to buy a home with cash. As the market has gotten more competitive, many real estate investors have taken this route.
An all-cash offer is usually a sign that you’re a serious buyer, giving you an edge over other buyers who are still trying to get financing in place. Of course, not everyone can pay cash for a home, but if you can swing it, it’s definitely worth considering.
Another way to be flexible is to be open to different types of properties. For example, if you’re primarily interested in single-family homes, you may want to consider condos or multi-family homes as well.
By expanding your search and being open to different property types, you can find a great deal on the right home for you. Remember that both the buyer and seller are going through an emotional experience during real estate negotiations.
Step 4: Offer Escalation Clause.
A clause in an escalation agreement enables a seller to increase an offer to the highest selling price submitted. The contract prices for the buyers’ goods or services are automatically escalated without the need for another contract resubmission.
The clause generally contains a maximum escalating amount. This method ensures that you have your offer in top-order order when bidding on a product.
Any good real estate contract will have an escalation clause to protect the buyer in case of a bidding war. This clause allows the buyer to automatically increase their offer by a specified amount if another bid is received.
For example, if you’re selling your home for $300,000 and receive a $310,000 offer, you might include an escalation clause that allows the buyer to increase their offer by $1,000 if another bidder comes forward.
This clause protects the buyer from being outbid and losing the home they’ve already agreed to purchase. As a result, it’s essential to include an escalation clause in any real estate contract.
This technique is one of the common strategies used in the competitive marketplace for outbidding competitors. The escalation clause will only be used for those who can raise their offers much above the listed price to make the deal happen.
Step 5: Use an Experienced Realtor.
Whether you are looking for a new home or trying to list your property in order to obtain top dollar, an experienced realtor can provide invaluable guidance and support every step of the way, providing you with a competitive advantage.
At first, your realtor will assess your specific needs and goals to determine the most suitable strategy for achieving your objectives.
This might include providing advice on pricing strategies based on market trends and comparable properties, conducting thorough research into potential properties, or helping you draft and negotiate a purchase or sale agreement.
Once you have found your ideal home, your realtor will guide you through the documentation and closing process, ensuring that everything proceeds smoothly.
And if you are selling property, they can help evaluate offers, communicate clearly with potential buyers, and represent your best interests throughout the negotiation process.
With an experienced realtor by your side, buying or selling real estate can be a smooth and rewarding experience. So don’t hesitate to reach out today – your perfect home or property may be just around the corner!
Some Additional Tips to Winning Real Estate
Larger Downpayments
In the real estate industry, one of the most commonly debated topics is whether or not buyers should be required to make a larger downpayment when purchasing a home.
Proponents of this idea argue that requiring a higher level of financial commitment from prospective buyers serves as a natural incentive to carefully consider their purchase and avoid overspending.
They also maintain that it will reduce the likelihood of defaulting on loans and prevent economic downturns, which can have negative consequences for both buyers and sellers alike.
However, other experts believe that requiring a larger downpayment could cause real estate prices to rise, making homeownership less attainable for those who are less experienced with real estate investment.
Ultimately, the real decision comes down to what is best for individual buyers, sellers, and realtors alike.
When negotiating a sale with a buyer, they consider downpayments to indicate financial stability. Generally, this means a buyer who puts more cash down will have more money to use if a problem arises.
Low appraisal values and expensive repair costs also help reduce sabotage if buyers do not already have money.
If you have additional income to pay your downpayment, you may consider increasing this sum so the seller can know you’re financially secure. If you have VA loans and have no money down, you should structure a new agreement that shows that the money will help you work out.
Offer to Pay for Seller’s Moving Expenses
When you’re making an offer on a home, you want to stand out from the competition. One way to do this is to offer to pay the seller’s moving expenses. This can be a significant amount of money, showing that you’re serious about buying the property.
Plus, it can help sweeten the deal for the seller. If you’re making an offer on a real estate property, consider offering to pay the seller’s moving expenses. It could help you seal the deal.
When you can help with your moving costs, you give a buyer a financial advantage, and the price does not have to increase with the sale price of the house. It bypasses appraisal and lending processes making it an excellent choice for knowledgeable purchasers.
Sellers may be more inclined to take your offer if it’s all-cash, but that doesn’t mean you can’t negotiate.
You might try asking the seller to pay a portion of your costs, or include some personal belongings in the sale.
No Personal Letters
There is no room for personal letters when it comes to real estate deals. All communication should be professional and businesslike to protect both parties involved. This includes letters outlining the terms of the deal, as well as any other correspondence related to the transaction, such as fair market value and asking price.
A personal letter can muddle the waters and create confusion, which can lead to legal problems down the road. By keeping all communication strictly business, both parties can avoid any potential misunderstandings.
This will help to ensure that the real estate deal goes smoothly and everyone ends up happy with the outcome with no ambiguities regarding the contract price.
Think Twice About Seller Love Letters
Several people are urging buyers to send them letters with their love letters in return. You can find many articles advocating for this practice, but you need to be extremely careful.
The letters could constitute a breach of the Fair Housing Act and expose the sellers and their agents to a possible lawsuit.
Individual buyers can be sued for their decisions. These data can’t be used to determine the purchase contract between sellers and buyers.
Offer To Pay All Title Insurance Fees
The seller usually pays a title insurer for their property in a lot of states. However, there is a strange tradition that buyers select their own title company and purchase an insurance policy for them.
The costs vary widely between states and regions.
You could also pay this property fee to ease this burden on the seller if you are selling a property. The chances are very much higher than another competitor would do this. This is a simple method that is widely adopted.
Winning a bidding war is still about satisfying the seller’s needs.
Ask the vendor about their goals when competing for bids. These strategies are effective for buyers and sellers alike. Get to know your buyer’s closing period prior to writing your contract.
Here are some questions to consider:
- Is there any flexibility on the possession dates?
- Does the inspector want you to limit inspections to prevent them from re-approving?
- Does anyone really have cash on the appraisal if their loan appraisal is not high?
- Is cash better for loans or financing?
- Does your preferred loan provider prefer pre-approved loans for you?
- How can I get an enormous amount of cash deposit?
So winning real estate bidding wars is not just about being the highest bidder. It is also about satisfying the sellers’ needs in other ways that are important to them. By understanding what the seller is looking for, you can make an offer that is more likely to be accepted.
You might not be the highest bidder, but you could still win the war.
Be Prepared To Move Fast
If you’re serious about winning a bidding war, you need to be prepared to move quickly. This means having your financing in order and being ready to close on the property as soon as possible.
The seller often chooses the buyer who can close deals the fastest, so you must be prepared to do just that.
You should also be prepared to waive any contingencies that might slow down the process. This includes things like inspections and appraisals. Plus, negotiating the closing date as quickly as possible.
By being willing to move quickly and waiving some of the contingencies, you’ll show the seller that you’re serious about buying the property, and you’ll be more likely to win the bidding war.
In addition, you’ll need to be comfortable with the idea of making a quick decision – often, you won’t have much time to think things over before submitting your bid.
Of course, this doesn’t mean that you should enter into a bidding war without doing your research first. You’ll still need to know your budget and what you’re willing to pay for the property.
But if you’re prepared to move fast, you’ll increase your chances of winning the bid.
Remove The Financing Contingency
Waiving your finance contingencies is a way to show the buyer that you are committed to selling the home. This can be a helpful strategy if the buyer is worried about getting financing or if other concerns are causing them to hesitate.
By waiving your contingencies, you are essentially saying that you will sell the home even if the buyer cannot secure financing. This can help to ease the buyer’s worries and make them feel more confident about purchasing the home.
There are a few things to keep in mind before waiving your contingencies, such as making sure that you have another source of income if the sale falls through.
However, if you are confident in the sale, waiving your finance contingencies can be a great way to show the buyer that you are committed to making the sale happen.
In many states, the approved sales contract contains provisions that allow the buyer to get a refund when the mortgage finance falls out.
In such circumstances, the buyer puts his property in foreclosure and then starts the whole process. If the financing fails to meet the agreed deadline, then the customer receives the full refund.
They must start afresh without gaining much benefit. The scenario can get exhausting for sellers and brokers. It is possible to waive your finance contingencies to relieve the buyer’s worries about this issue.
Conclusion
If you’re looking to buy or sell a home, it’s important to be aware of the steps that go into winning real estate deals. By being flexible, well-connected, and open to different property types, you can position yourself for success in today’s competitive housing market.
These are just a few of the things you and your real estate agency can do to increase your chances of winning a bidding war. If you’re serious about buying a particular property, it’s important to be prepared and to know what you’re up against. By following these tips, you’ll be in a much better position to win your next bidding war.
