KGCI: Real Estate on Air - How To Win In Multiple Offers

Episode Date: May 9, 2025

And welcome to another edition of the nerdy agent podcast, AJ Stop Texting. We're filming. We're filming just because the gophers are going to beat Wisconsin tonight and we're going to storm the field. Storm the court. He doesn't mean you text on the podcast. You know how Post Malone's got always tired underneath his eyes? AJ will do always working. Never stopping.

My favorite is when I look at AJ's guy's double phones, now he's got personal in the business. And he takes it and he just goes like this. Open him like a book. We should invent a phone that's two phones and one that flips so you can have two texts but it's connected. It's a flip phone but it's two phones. Can they be separate though? Correct. No.

Yes. They zipper. They can zippers down the middle. We are punchy. Whoever wants to take this idea and run with it. Go ahead and lose all of your money. Yeah, you could do that. But if you do make money, we will sue you.

I think there's something called the like proprietary knowledge or something. I definitely thought of it first. All right. Well, this week, this week we are going to talk about winning in multiple offers and what you should do as a buyer's agent in those scenarios to give your buyers the best possible chance. The reason I wanted to chat about this this week is I had a listing this last weekend. And I was a little bit surprised as to, you know, the offers were written pretty well, but there wasn't as much like calling me and asking me where they were in the order of offers and

if there's anything else they can do. And so I wanted to chat about that. But to start, I was looking at the numbers. We got an email yesterday and I was just asking AJ, how many sales has the advisory realty group turned in in January so far? I think like 20. or 28. We are doing quite a few sales comparably to, I would say, the market. 60 pending and close for the year. There you go. That's incredible. That's pretty incredible. Awesome start. We are still, believe it or not, even though we're able to get that many sales under contract and have our agents running pretty rapid around. We still have a lot of leads in our lead chat that are not getting claimed. That could be good opportunities for other agents looking to make a change. And I know I plugged this last week, but I'm going to plug it again. If you're looking for something different, we'd love to chat with you. We'd love to grab. coffee. I think me and AJ or I'm coffee with someone tomorrow who's going to be a pretty fit for our team. We got one this afternoon together, agent. We got one this afternoon. So we're

growing pretty rapidly. We're always looking to add good agents. So even if it's, even if it's somebody you know, and it's not you personally, we'd love to connect. So let us know on that. But back to what really matters. That was the would you rather. So we're going to skip the wood you rather. Should we role play this? Roll play the, you're the listing agent. So let's back up. We can do that. But back up. So you're a buyer's agent and you go to show a house. What's the, what's the first thing you should do? Especially in this market. You're driving over to the house. So one, yeah, this is one thing that one person in our team started about what two years ago, Reed started talking about this. And everyone's like, oh my gosh. It's something that no one does. But read literally every house that he drives to and we started taking this and telling our agents to do this. Before he gets there, he calls the listing agent on the phone on his way to the house and says, hey, I'm, you know, Josh from the advisory realty group. I'm showing your house at two people. PM. I just wanted to check in and make sure, is there anything specific that I can do to make sure I, you know, I give a great showing to my client today. And it's establishing rapport. It's talking to

that agent. It's trying to get on the same kind of page and team as them because you want a listing agent to like you if your buyer ends up liking that house. Then on top of that, if the listing agent's like, yeah, this, this, this, this, right? You have a conversation. I would ask questions like, hey, is the showing activity been good on it? How many have you had so far? Any offers in hand? I explained this to my clients. I had two buyer meetings this weekend and it would explain him to me as I played detective for you, right? My job is to ask a lot of questions and to learn a lot of information so I can best advise you as a buyer on what you're going to need to know to make a decision on this house. It's one of the biggest faults that we see with other agents on the

buy side is they don't call, they don't talk, they don't communicate, they don't ask questions or learn anything. They just kind of shotgun out things or, you know, just ask their clients, So what do you want to offer? And then they just make an offer and they throw it out. So you drive over to the house, you call the agent. That's step one. You show the house. Your buyer then decides that they want to offer on the house.

What's the next step? Well, it depends that they have offers or not have offers. We're assuming this is going to be like, yeah, they had offers going in. So you call them, they said they had offered. Yeah, I mean, there's a lot of different scenarios. I've talked to a couple agents on our team this week who were running into competitive situations where they were going to get offers, but they didn't have any offers yet, which we don't need to get into all of that.

But if they do a lot of that, but if they do a lot of, have offers and they've created a deadline, right? Let's say they said highest and best for 6 p.m. I say, here's the deal, guys. There are three terms that matter more than anything most of the time, 99% of the time. I can ask the listing agent what the preferred closing date is or if they want a written statement or if there's some earnest money, you know, there's smaller items. Everybody wants to know the preferred closing date. What is the preferred closing date? I was like, I get it, but I was like, just throw one on there. I'll just tell you which date when we get that point. If we have a preferred closing date, we'll put it in the notes. I'll just counter it. Yeah. Yeah, exactly. So that stuff

isn't usually the utmost importance. The first thing that's the most important is how much money is the seller going to walk away with at the closing, right? So if this closes, what's the check the seller is going to get? So who has the highest price? One could say. Yep. And then you have the secondary most important terms, which are, is this house going to appraise? And if it doesn't appraise, what's going to happen? What's the protocol? Is the buyer paying some sort of difference up to a certain amount? It's paying the whole thing. Kind of how is that going to play out? Because a seller, you love that you're getting this high price, but then some third party comes in and says, eh, it's not worth that. And it would be a shame for that seller in a competitive situation to,

you know, just be like, oh, I'm getting $20,000 less than I thought I was going to get now because this person said this thing. So the buyer has to do something to make the seller feel good about the appraisal. For those who don't know, we did talk about appraisal guarantees. It was probably a while back. But remember, if you are a buyer's agent and you have a client that's putting more than 5% down on a property and they qualify at 5% down on that property, whatever the difference above 5% is, theoretically could be an appraisal guarantee. If you're putting 10% down on a $300,000 house and you qualify at 5% down, that buyer can put 15K for the appraisal difference, 5% of 300. And they can just lower their down payment to 5% and use the 15 cover the difference. And it's

legitimately basically the same thing. They'll have a few more payments to get to 20% to remove PMI, but it's a really good way to essentially hack that appraisal system. Yeah, it will keep the same loan balance. Typically, it will be the same rate. Make sure if you don't have a good lender that you're in touch with, that you talk to them. The only thing that's going to increase is their MI premium, which it might not be that much, but it will make their payment go up just a little bit.

Would the amount go up on the MI premium? Yeah, the payment will. Because at 10% it's a little bit cheaper than it is at 5, but that's still, it's still not the end of the world. And if it gets them the house, most people are pretty thrilled if their MI is up 50 bucks a month and they got the house because they had that gap in there. The other secondary item that's very important, which we've talked about, is inspection. So are you doing an inspection?

Is there any language around what would allow you to negotiate or back out of a contract during that inspection? Are you skipping the inspection altogether? Right. So we and age in our team, his buyer was feeling frustrated because they lost three offers over one week. And I said, well, what were the offers? And he told me.

And again, most of the time, our guidance, when there's more than three or more offers is you've got to be about 8 to 10% over the list price on a net basis. So no closing costs and price needs to be 8 to 10% over. And that could be an escalation clause. And again, we don't need to get into all the ways that we do this, but you need to be around that number to be competitive. Secondly, you need to have these strong appraisal language. Third, you got to have, if you're doing an inspection, it's got to have some strong language around it. Now, at the end of the day, and ideally would be a faster inspection. A faster, yeah, sure. Less than five days. And at the end of the day, this agent on our team, whose buyer lost these three offers, the first one they got

second place, and they made a pretty good offer. The second two, they made really good offers, but the second offer, they got a cash offer that they said, we're just not going to do the financed offer because we can get a cash offer and we're going to go with that. Whether people agree with that or not, doesn't matter. It's the seller's house and their decision, right? The third one had a no inspection offer, and this buyer just isn't willing to not do an inspection for good reasons, but you can't control for that. So I think it's really important when, to Josh's point, you're doing a buyer meeting that you're setting the expectation of, if we're doing an inspection and a seller values no inspection over all else and they can get the, like, push that person to your price and

get no inspection and you lose, you're going to have to be okay with letting that go over that term, right? Yeah, what I tell every buyer in these buyer meetings is, is I'm going to give you what I think is the like 75% chance likelihood of winning offer. I'll tell you what it is. And it might have no inspection in it, but I'm not going to encourage you to do that, I'm just going to make you aware of if I was going to say, hey, here's a winner or here's a competitor if there's 14 offers, here's what it would be, right? And I'll let you know up front

kind of what that looks like. And then you can make the decision if you want to go with that or not. But the goal should be as an agent, every single one of us listening to this, doing this for a living, you should be able to get to the point where you know roughly what that winning offer is going to be on every house you offer on. And I think that's something that. very few people actually feel like they get to, and they need to work harder to get there, in my personal opinion, right? As a listing agent, I'll list a house that gets six, seven offers, and three of them will just be emails.

They've never called me, they've never asked a question, they've just sent an email. How are you expecting to be anywhere near the right place with no information about what's going on with that deal, right? It's of the utmost importance, our job is to help our people have success to give them the information to make that decision as to whether or not they want to throw out something that's really aggressive. It's their choice, but at least you need to give them the information to be able to make that choice at the end of the day. And I often say the listing agent should feel bad if they have to tell you that you lost. I don't feel bad when someone just shoots an email

to me and then I just respond with my email saying, sorry, you lost. I'm more feel annoyed in that case. It's annoying, right? But if someone's calling me saying, oh, I've worked with these guys for so long, they've made so many offers. This was such a great offer we thought. And, you know, their dog's going to love playing in that backyard and they're having a baby. And they tell me this whole story. I'm like, I mean, I'm sorry, we're going to go with the best offer. But like, we may say, hey, these guys have been super communicative, right?

Yep. They're on top of it. They have a great offer. Do you want to see if we can push these guys to be the best offer? Maybe they've got a really great loan officer that I've talked to. Maybe I just know that this agent does a lot of transactions and is really on top their stuff versus the best offer who didn't do anything, right? Maybe the agent made no mistakes on the PA and the best offer made four.

They missed a bunch of boxes. Exactly. So, and again, it's not that just because they tell you about their family. You obviously cannot discriminate based on these kinds of things and you have to inform your sellers. You can't do that. But if someone's being really, really communicative and really thoughtful, you should get to the point where that agent feels bad calling you and telling you, sorry, you didn't win.

Yeah. So that goes back to like, you see. So we talked about the pre-showing call. Talk to the agent. But after you do a showing, do you want to jump in or something? So we talked about the terms that would go into that, but you're done doing the showing and they want to offer. Yeah.

Or even they liked the house. They liked that. Right. Because they're same scene. A same scene five. They go through the showing. We've had a phone call. They finish the showing.

I will call the agent again saying, hey, the showing went really well. Like they're legitimately interested. We have some others that we're looking at. And even if we don't, I always at least say that. Because if they don't have any offers, you might create some leverage that way. So I'm just curious, like, you know, like if you've already learned you don't have, you have offers, but like what kind of things are you seeing in your offers? Roughly, I mean, like, you know, they're preapproved at this level. Is that going to work for you?

They really want to have inspection just because they're first time home buyers and I just want to make sure that they're comfortable with it. I can put language basically saying like we're not going to negotiate anything. That's not at all what we're operating under. But they just want to be safe because I kind of hate this world where we're throwing no inspection offers out all the way. Because there are some agents who hate the new inspection world too. So you're creating a relationship. You're asking questions. And one that I always use is you get anything crazy in hand right now, right?

Like you get any crazy offers? And based on how they respond to that, you can kind of get to rough estimates of price points. People will talk way too much on the phone if you just call them and start asking questions most of the time. Yeah. How is 350? Is that in the pall park? Are we competitive at that point? So you've had that conversation.

You get some information. They end up wanting to offer. You submit the offer. there is what I usually right before the deadline like 30 minutes for the deadline 15 minutes before the deadline make another call yep and I'm going to say if you're talking about a situation where there's a deadline right yeah so multiple offers they call highest and best you submit the offer they receive the offer you wait until close to the deadline because a lot of people will hold their offers and submit them at the last second so that initial conversation is helpful yep but if they've

rolled in former offers since you talk to them the agent didn't have that information prior the last thing I always do is call and say hey how do we where do we stand can you you give me any idea on where we stand and if there's anything we need to do to adjust to give us a chance to win. Yeah. Or are we in the mix is the way? Are we in the mix? Yeah. Are we in the mix? Yeah. Are we in the mix a good one? And almost just go back through the same thing. Yep. That you said earlier. Absolutely. Absolutely. But then follow up every hour afterwards, you know, like just, hey, how's it going? You need me. I'm available. And I think the other key here that we haven't talked about is just making sure that you're updating your client on what you're doing. So saying, hey, I talk to the agent,

here's what they said before we make the offer. Hey, I just called the agent because we're 30 minutes from the deadline and asked them if we were in the mix. They said we were close, just letting you know. And then an hour after being like, hey, I've reached out to the agent. I haven't heard anything yet. Like doing that kind of stuff makes them feel a lot better. So they don't feel like they're just waiting in the dark and going thinking, we for sure

lost. We for sure lost because we haven't heard anything. And what that does is lets them know that you're trying really hard. So if you lose, it's less, they feel less like, well, you didn't do anything. thing. Like, what happened? How did we lose? And they'll feel more like, well, I guess it's just someone beat us. And if you lose, trying to get some information out of the listing agent and the agent on our team did that. And it's like, well, we, sorry, we had no inspection in cash. It's like, that's good to know. So now I can call my client and say, sorry, they got no inspection

in cash. You made a great offer. It's just you're not going to beat that. Yep. The other one, too, just before, this is, we're almost done here. But just before we get to the end, the, the, the, do you have any crazy offers? Are we in the mix? A lot of the times, too, all just say, do you have cash? Are there any no inspection? Do you have any appraisal guarantees? They typically will tell you those things. And if they do, like if they say, yeah, we have an appraisal guarantee, it's like you're going to lose if you don't add an appraisal guarantee that just about means every single time. Because that's going to, that's the gold and what they're looking for. Yeah, and read the agent in the conversation, right? So that's the whole thing. You make the first phone call,

you're establishing rapport. You're not asking for anything from them. You're just establishing rapport. You're actually asking, how can I help you have a great showing at? listing, right? And you can usually tell from that first conversation, like, is this someone that's going to be communicative, engaged with me, or is this someone that's just like, I'm playing it close to the vest, I'm not telling you anything? And from there, you can then determine how you continue to approach it. But if you make friends with somebody in the first call, and then you say, we're probably interested and you ask some questions, and they're once again, friends with you, they're going to keep offering more information to you as things go, because they're kind of internally

rooting for you to be that agent for them. Well, because half of their job is to get, get the offers and accept one, but the other half is to make sure it closes. And there's a lot of agents out there that don't know how to close deals and get their buyers at the finish line for whatever reason. And so if they feel like you can do that, you're going to have a better chance to win it. It's going to be in your buyer's best interest. We covered it all. That's all we have this week.