{"id":3662,"date":"2022-04-02T07:15:05","date_gmt":"2022-04-02T07:15:05","guid":{"rendered":"https:\/\/linksus.net\/how-to-skirt-the-bidding-war-agents-share-their-strategies-inman\/"},"modified":"2022-04-02T07:15:05","modified_gmt":"2022-04-02T07:15:05","slug":"how-to-skirt-the-bidding-war-agents-share-their-strategies-inman","status":"publish","type":"post","link":"https:\/\/linksus2.linksus.net\/index.php\/2022\/04\/02\/how-to-skirt-the-bidding-war-agents-share-their-strategies-inman\/","title":{"rendered":"How to skirt the bidding war: Agents share their strategies – Inman"},"content":{"rendered":"

Getty Images\/Bill Varie
In today\u2019s competitive market, houses in all price ranges are drawing multiple offers, leaving many buyers in the lurch and exhausting agents. Here, pros share with Inman how they’re getting by and what they see as the path forward.
Inman Connect
The Inventory Inquiry is a week-long Inman series analyzing the ongoing housing shortage. We\u2019re digging into the state of the construction industry, the listing void that startups are vying to fill and the own-to-rent boom causing inventory schisms nationwide, among other big issues. Check back for more on the inventory imbroglio, all week long.<\/em>
For nearly two years now, Jennifer White has been working with a couple who sold their home in Ponta Vedra Beach, Florida, and moved into a rental while looking for a new home.<\/span>
The couple has consistently made offers over the past two years, but despite being well qualified, they continue to be outbid. The intense competition has worn them down.<\/span>
\u201cThey\u2019re losing over and over again because now they\u2019re like I don\u2019t want to pay X price,\u201d said White, an agent with RE\/MAX Specialists Ponta Vedra. \u201cAnd, well, guys it is never going to be X price again. We have to get over that hurdle.\u201d\u00a0<\/span>
Meanwhile, the couples\u2019 rent has increased to more than they were paying for their mortgage, and the unwelcome feeling of having missed the boat is settling in.\u00a0<\/span>
In markets across the nation, competition has hit a fever pitch, with more bidding wars recorded during January 2022 than any other month during the pandemic, <\/span>according to the online brokerage Redfin.\u00a0<\/span><\/a>
With historically low inventory and skyrocketing prices, houses at all price points, from the sub $300,000 range to multi-million-dollar properties are drawing several offers, leaving buyers without the means to make cash offers in the lurch and exhausting their agents.\u00a0<\/span>
\u201cYou really feel bad for those buyers,\u201d said White, who works as both a buyer and listing agent. \u201cYou see their names over and over again, you see them changing up their strategies, and in the end, it\u2019s just not even working.\u201d\u00a0<\/span>
With no end in sight to the current market conditions, agents told Inman about their strategies for avoiding bidding wars when possible, and what they think needs to happen for the conditions to change.
In some ultra-hot markets, like Florida, where White represented one house that garnered 27 offers, agents said there\u2019s no real way to avoid ending up in a multiple-offer situation. There is simply too much competition.<\/span>
In slightly less frenzied markets, agents say bidding wars are common \u2014 but savvy agents have ways of avoiding them.\u00a0<\/span>
Jennifer Leahy. Image: Douglas Elliman
For Douglas Elliman agent Jennifer Leahy, the most important method for closing without competition is knowing your market well enough to have a working relationship with the listing agent of the house your client is interested in. Human connection is your best friend, the Connecticut-based agent said.\u00a0<\/span>
\u201cFirst and foremost know the inventory. If you don\u2019t know the agent find someone in your office who knows the agent and establish a rapport with them agent-to-agent,\u201d Leahy said. \u201cAgents that don\u2019t treat other agents well are very confusing to me because they are the most important people that we\u2019ll work with for the rest of our lives.\u201d\u00a0<\/span>
Tim O\u2019Hare, a broker with Berkshire Hathaway <\/span>HomeServices McLemore & Co. in Memphis, Tennessee, echoed this strategy.<\/span>
\u201cMore than anything I think it\u2019s having good relationships with all the agents,\u201d he said. \u201cIf I can call and make that other agent feel like they\u2019re the most important person in the world and this is going to be the easiest transaction they\u2019ve ever done if they work with me, I do know that they\u2019re going to present that in a different light. It definitely has helped win some deals.\u201d<\/span>
Tim O\u2019Hare Image: Linkedin
Buyers should attempt to set up communications with sellers early on, and it doesn\u2019t hurt to be a little sappy.\u00a0<\/span>
\u201cPull on peoples\u2019 heartstrings,\u201d Leahy said. \u201cI tell my clients to write a letter about the property and why you want to own it and how you\u2019re going to be a good steward of it.\u201d\u00a0<\/span>
Chicago RE\/MAX agent Mike Opyd said he encourages his clients to be flexible. While houses in some neighborhoods in the windy city are all but guaranteed to attract multiple offers, there are still less-hot areas with less competition.\u00a0<\/span>
\u201cI\u2019m always suggesting \u2018Hey, look at this area next to it,\u2019\u201d he said. \u201cIt\u2019s up and coming, you live there for a little bit you\u2019re going to get the returns on all the new development that\u2019s going on that\u2019s going to drive prices. It might not be exactly what you\u2019re looking for, but it\u2019s pretty damn close and you\u2019re not going to overpay.\u201d\u00a0<\/span>
Mike Opyd Image: RE\/MAX
In line with expectation adjustment, he also advises clients to look at things slightly below their price point that may not be as glamorous \u2014\u00a0and therefore less likely to draw attention.\u00a0<\/span>
\u201cNaturally buyers are going to be attracted to the sexy stuff right away,\u201d he said. \u201cAnything you see that looks great, you know is where all the eyes are going to be at. So the strategy I\u2019ve been telling people is to have a conversation with your clients to say \u2018Why don\u2019t you drop it down in price point, and look at the stuff that\u2019s not brand new, modern, and sexy? What about the stuff that was maybe remodeled in the early 2000s where you get the brown cabinets, the granite countertops \u2026 stuff that\u2019s not quite up to date right now but doesn\u2019t need a gut rehab.\u2019\u201d\u00a0<\/span>
Though reducing their buyers\u2019 price point might not be the first thing most agents think of, finding a house with less competition will make it more likely they finalize a deal in the long run, Opyd said.\u00a0<\/span>
\u201cDropping down is not what most agents want to hear because, obviously, it\u2019s a reduction in pay,\u201d he said. \u201cBut I look at it as I\u2019d much rather get paid than not get paid.\u201d\u00a0<\/span>
With Redfin data showing<\/span> buyers who waive financing contingencies and conduct pre-inspections to have 31 and 25 percent better chances<\/a>, respectively,<\/span> of coming out on top in a multiple-offer situation, agents confirmed the strategy can be effective, but cautioned against going so far as to waive an inspection.<\/span>
\u201cI want people to do inspections,\u201d Leahy said. \u201cHouses are quirky.\u201d<\/span>
Experts recently polled by Zillow<\/span> were torn between 2023, 2024 and 2025<\/span> as the year inventory levels may return<\/a> to their pre-pandemic numbers<\/span>
But one factor that will remain once inventory levels return to normal is property investors, who are buying<\/span> nearly one in seven homes<\/span><\/a> in America\u2019s biggest metropolitan areas.\u00a0<\/span>
O\u2019Hare sees the unsettled<\/span> state of the bonds market<\/span><\/a> as a factor driving more and more investors into the homebuying market for the return on investment it promises.\u00a0<\/span>
\u201cWe have a lot of hedge funds coming in because of the bond market and the way it is,\u201d O\u2019Hare said. \u201cYou got a hedge fund that\u2019s looking at less than 2 percent in the bonds than they\u2019re normally used to and they\u2019re like \u2018Wait a second I\u2019ll just go over and do real estate, and I\u2019ll pay a ton of money to get a house and get a small return on investment and it\u2019ll still be better than the bonds are.\u2019\u201d<\/span>
O\u2019Hare hopes for the eventual stabilization of the bonds market and further increases in interest rates to lessen the investor frenzy in markets like Memphis.<\/span>
\u201cInterest rates and investments in those bonds, I think, really need to get better to decrease some of the big money investors and level out the playing field to where you still have the mom and pops who can invest, but those are mom and pops who live locally and care about the community,\u201d he said.<\/span>
\u201cWhen we can normalize that again I think your first-time homebuyers and owner-occupants are going to have a better chance,\u201d he added.\u00a0<\/span>
But the best balm for bidding wars is more inventory<\/a>, which O\u2019Hare hopes can be achieved eventually through reductions in local regulations.<\/span>
\u201cIt really all goes back to inventory,\u201d he said. \u201cTwenty to 25 percent of the cost of building a new home goes towards government regulation. If we can reduce some of those \u2014 there is land there.\u201d\u00a0<\/span>
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Getty Images\/Bill VarieIn today\u2019s competitive market, houses in all price ranges are drawing multiple offers, leaving many buyers in the lurch and exhausting agents. Here, pros share with Inman how they’re getting by and what they see as the path forward.Inman ConnectThe Inventory Inquiry is a week-long Inman series analyzing the ongoing housing shortage. We\u2019re […]<\/p>\n","protected":false},"author":869,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[],"tags":[],"_links":{"self":[{"href":"https:\/\/linksus2.linksus.net\/index.php\/wp-json\/wp\/v2\/posts\/3662"}],"collection":[{"href":"https:\/\/linksus2.linksus.net\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/linksus2.linksus.net\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/linksus2.linksus.net\/index.php\/wp-json\/wp\/v2\/users\/869"}],"replies":[{"embeddable":true,"href":"https:\/\/linksus2.linksus.net\/index.php\/wp-json\/wp\/v2\/comments?post=3662"}],"version-history":[{"count":0,"href":"https:\/\/linksus2.linksus.net\/index.php\/wp-json\/wp\/v2\/posts\/3662\/revisions"}],"wp:attachment":[{"href":"https:\/\/linksus2.linksus.net\/index.php\/wp-json\/wp\/v2\/media?parent=3662"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/linksus2.linksus.net\/index.php\/wp-json\/wp\/v2\/categories?post=3662"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/linksus2.linksus.net\/index.php\/wp-json\/wp\/v2\/tags?post=3662"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}