How to Manage Competing Buyers
Powerfact: Negotiation and communication skills are more important than ever!
By Real Estate Coach and Speaker Darryl Davis, CSP
What happens when there are more buyers than listings? Occasionally – you end up working with two different buyers who are both are interested in the same house. That’s a great problem to have! However, handling that situation can become a little bit complicated, and this scenario can be managed a couple of different ways.
Stay Away From Favoritism
The first suggestion is to ask another agent to represent one of the other buyers, or even two agents, one for each buyer while you oversee the process. That way, nobody can say you are playing favorites. This is not my ideal way to handle this situation, but it is an option that many agents use, and it works.
Honesty is the Best Policy
The second way, and the one that I prefer, is to be upfront and honest with both buyers and tell them that someone else you are working with is interested in the same house. I firmly believe that this is the best approach, because instead of going back and forth with the homeowner and creating a bidding war (and believe me, nobody wins in a bidding war!), this the approach you are going to take — cut to the chase. This is what you are going to say to both parties:
“Here is my recommendation. We are not buying an investment property to flip; we are looking to purchase your home. Based on that fact, that we are looking for a place that you can call Home, there is a number that you are willing to pay, the absolute maximum amount, that if it were even $1 more, you would not regret losing the house for. If you made an offer for $200,000, and the house sold at $205,000, would you kick yourself for losing it for that $5000?”
Lead With Your Best
The key to this approach is to avoid all the haggling and negotiating and going back and forth…nobody wins that way. Inform both buyers that you are presenting this same proposal to both parties because this is the fairest way to go about this conundrum, and this way, neither buyer will feel like they are being taken advantage of.
Then, when all is said and done, you can tell the buyer who bid the most they won the bid and the offer was accepted, and naturally they will be thrilled about it. When the other buyers are unhappy at losing the bid, you can remind them that they offered their best and top number, and the other buyers simply offered more. If they ask how much more, you tell them that it doesn’t matter because they gave their best and final number, and that it’s was time to move on and keep searching for their dream home.
It can seem like a tight spot when you are representing two buyers who both want the same home, and at the end of the day, you want to maintain both those client-relationships and the best way to serve them is to be honest and fair, and they will appreciate that. While it might not always work out for one buyer like they hoped, you will still be there to serve their home buying needs.
Power Agents, one of the most important things you can do is to establish and communicate value as a Buyer’s Agent with customers from the start. Having the right collateral tools is a key ingredient to help you do that. Head over to the Buyers tab in your Classroom for these forms and more that can help you navigate buyer relationships and attract new buyers!
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