How Real Estate Agents Can Help Guide Clients Through a Bidding War

If you work in a hot real estate market, you’re probably no stranger to bidding wars.

The non-stop phone calls. The number-crunching. The stress, exhilaration, excitement, and let-down.

For real estate agents, it’s a time of heightened stress. But for their clients, it’s a wild roller coaster ride.

Knowing how to guide clients through a bidding war is an important skill for agents. It’s not just about helping clients win; it’s also about making them feel prepared, informed, confident and calm.

If you can do that, you can guarantee yourself a glowing real estate testimonial from your clients — even if it took a few more tries to get their dream house.

Want to be that kind of agent? Then take our crash crash in how real estate agents can help guide clients through a bidding war.

Help Your Clients Prepare

You wouldn’t let a client start house shopping without being pre-approved for a mortgage. That’s the bare minimum. But if they’re house-hunting in a hot market, they need to have more than just their bases covered. That’s where you come in.

If you suspect your clients might encounter a bidding war in their search, you want to make sure that they’re prepared with:

• A stable financial situation. Pre-approval is one thing. But do your clients have secure jobs they’ve been at for a while and have no plans of leaving? Do they have any other major financial obligations on the horizon (e.g., big vacation, child’s university tuition, etc.)? Have they saved for every possible extra cost, like fees for lawyers and inspections, moving, and unforeseen issues?

• Their absolute budget maximum. Buyers often think they know their limit… then they fall in love with a house that gets 15 other offers, and suddenly they’re rethinking. Encourage buyers to determine and resolve themselves to an absolute final number ahead of time. This helps them avoid fiscally irresponsible decision-making when they’re feeling FOMO — fear of missing out — during a bidding war.

• The terms they’re willing to compromise on. Winning a bidding war almost always comes down to offering the most money and the least conditions. But everyone has deal-breakers and terms they’re not willing to budge on. Make sure your buyer knows and feels confident in theirs before they make an offer.

Ask *This* Question

“What is this house worth to you?”

You should be asking your clients this as soon as they decide they want to put in an offer.

This question isn’t about their budget. It’s about how the characteristics of a certain listing will impact your client’s approach.

For example, a home with a mobility ramp will have higher value to a client whose parents use walkers. A home located on the same street as a reputable daycare would save a client with young children time and money — that’s valuable.

If it’s valuable, it’s worth going in strong.

This evaluation helps you and your client walk into a bidding war situation feeling prepared, confident in your approach, and less likely to succumb to spontaneous decisions that are (once again) motivated by FOMO.

Make Yourself Extra Available

Guiding your clients through a bidding war requires a heavier lift than guiding them through a regular offer process.

They’re going to be looking for not just advice and information, but comfort and reassurance. Make sure you’re prepared to offer them more of your time than usual. You should be willing to respond to calls and texts at a faster rate, and ready to meet up in person more than usual, and with less notice.

Set limits, of course (e.g., no calls or texts after 10 p.m. unless there’s news to report), but let your buyers know that you’re there for them.

Be (Brutally) Honest

Bidding wars are emotional. It’s easy for buyers — especially those who have never been through the process — to become caught up and feel desperate, willing to do anything to win.

No matter how badly you want the commission, it’s your job to keep your clients from making any decision that isn’t in their best interest.

Sometimes, that requires frank conversations and brutal honesty about what’s affordable, what’s worth it, and when to walk away.

Of course, that brutal honesty can go the other way, too. If you think your client is at risk of losing out on the best possible home for them, say so.

This doesn’t have to lead to conflict. It’s all about how you communicate. Just remember to continually remind — and prove to — your client that your goal is to help them make the best possible decision, not simply to find a house.

Be a Friend, Too

Back to how emotional bidding wars can be. Your expertise and frank advice is essential to being a good agent to your client. But so is your kindness and empathy.

Don’t be afraid to take off your real estate hat for a second and approach your client as a friend. Sympathize with their situation — the stress, the tough decisions, the waiting, the disappointment. Show them that they represent more than just a paycheque to you.

What does this look like in practice? Text them to see how they’re feeling (not just when you need an answer to a question). Take them out for a drink. Drop off flowers or treats. Let them know you’re invested in them as people.

How do you ensure your clients feel properly cared for during the stress of a bidding war?

Last Updated on June 28, 2024 by myRealPage