When you represent a buyer in a sellers’ market, many different factors come into play. Here are some tips for success, according to Jeremy Olsher, broker of Mizner Residential Realty in Delray Beach, Florida:
1. The Realtor showing the property needs to know all of the comparable sales in the last 90 days for any community that a particular buyer is looking at. This way, the Realtor can educate the buyer to how fast homes are selling, how close to asking price, the average price per square foot, and what kind of terms the seller has been accepting (cash, mortgage, seller financing, etc). The numbers don't lie, and setting expectations early with your buyers is essential.
2. Make sure the buyer is qualified to buy prior to showing them properties. Whether the buyer is a cash buyer, or a financed buyer, they need to be qualified, and know how much a home is going to cost them. It costs money to borrow money, and closing costs on a loan when you buy a home are close to 2.5% of the purchase price in Florida. Buyers need to know that going in.
3. When submitting an offer on any home, the buyer needs to show their proof of funds (for a cash purchase or for the down payment money) and/or pre-approval letter to any seller. This is a must to show that the buyer is serious, prepared to purchase, and solid.
4. There are properties that are going to be overpriced on the market in a sellers’ market, and properties that are going to be asking market value prices. If a buyer finds a property they are interested in, and their Realtor sees that the asking price is on par with what the value of the home is, an offer needs to be placed immediately in writing (in Florida, verbal offers are non binding), with favorable terms to the seller, with a proof of funds or pre-approval letter accompanying the offer.
Favorable terms to a seller would be:
Substantial money in escrow- 2% is low, 10% is high.
Shorter inspection period- 3 days is low, 15 days is high
5. Find out when the seller wants to sell- do they want a quick closing, or a longer closing? Check with the seller’s Realtor, and reflect that in the offer.
6. Give the seller a few extra days to consider the offer (asking a seller to sign an agreement fast works only if the terms are very favorable to seller- above asking price, cash deal, no inspection, etc). Otherwise, give the seller an option to sell. Give some time, but not too much time- one day is low, and seven days to accept is high. There is a line in our agreements give a time frame to the seller to accept the offer. Do not leave it blank.
7. Having a complete clean offer in writing is also essential. Make sure that every offer you present to a listing agent is clean. A complete offer at the same price vs an incomplete offer is going to win 9 out of 10 times. Complete means having everything signed and initialed and dated by your buyers, with the terms that are favorable to seller, but yet your customer understands them. Have the pre-approval or proof of funds or both to accompany the offer, and present in writing in a clean PDF format to the other agent.
8. Another smart move for a buyer is to write a letter to the seller to accompany an offer. Stating who your buyers are, why they love your home so much (we can see raising our family here for many years, this house is exactly what we have been looking for). A short bio about who and why is a nice touch.
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Jeremy Olsher is the Broker and Principal of Mizner Residential Realty. He has been a full-time licensed, realtor in Delray beach, Florida for fourteen years. Since February 2005, Jeremy has worked through the challenges, changing market conditions, and ups and downs of the South Florida real estate market.
- Jeremy Olsher, Broker - Mizner Residential Realty