“Multiple offer strategy” is an approach to selling real estate with the intention of maximizing the sale price of a property, using a system based on the principle of supply and demand.
The property is marketed in a way that maximizes the demand from potential purchasers and then leverages that demand to obtain the highest possible sale price. This results in multiple offers in a sellers’ market, and a sold listing at fair market value in a buyers’ market.
How it Works
Several buyers compete by placing offers on a single home. The seller chooses the best 2 – 3 and the realtor keeps revising and resubmitting the offers. The buyer that submits the highest offer seals the deal.
At first glance it would appear that this strategy works only in a sellers’ market, by receiving the maximum asking price. However, during the cycle in a buyers’ market, this approach ensures that a property will be sold at fair market value with less chance of the listing becoming stale or expired.
Supply and Demand
Multiple offer strategy is based on simply supply and demand-the number of similar properties on the market and the number of purchasers interested in them.
There is very little a seller can do to influence the supply side other than choosing a time to sell at a period when the inventory of homes is slightly lower such as early spring or just after Labour Day.
However, on the demand side of the equation, there are several factors in the sellers favor. By pricing a home realistically, you will attract the right buyer that can afford it. To do this effectively, you also need to appeal to the emotions of the buyer.
This requires a carefully detailed comparative market analysis to provide the seller with all the information needed to make a well informed, rational decision about pricing their home to increase the demand.Â Several factors are considered such as accurate timing when interest levels are piqued.
For example, by withholding the listing from public access OnÂ www.realtylink.orgÂ andwww.mls.ca, there is a greater initial demand when it does show. During a fast sellers market, qualified and motivated buyers will see the listing within the first few days. After this initial surge of buyer activity, the curve will drop and a new set of buyers will look.
Research has shown that despite the rush of these early-bird buyers during a fast sellers market, the ones that actually make an offer are the latter group that have completed a more extensive research. These buyers are ready.
In a slower buyers’ market, buyers are still motivated, but because the urgency and fear is abated, their decision process is longer. In this case, early-bird buyers are the most motivated and qualified and ready to buy. Offers can be considered after the first or second day of showing.
Leveraging Buyer Feedback
Timing is critical. Every potential buyer should be contacted within 24 hours of the showing to get feedback on their impression, level of motivation and potential interest in order to optimize results for a successful sale.
Getting this information puts the seller in the driver’s seat by allowing the agent to leverage the buyer’s interest based on the feedback.
Hire an Expert
Stefan Gerber specializes in multiple offer strategy. He manages and executes a very savvy approach using several proven methods to increase demand.
By taking a great care in developing well-prepared listings, and by creating good relationships with his colleagues, Stefan is assured that other agents will show his listings.
Results are also augmented through active prospecting by speaking to 30 – 60 potential clients every day including calling the neighbours surrounding each of his listings, as well as past clients.
The bottom line is it all comes down to supply and demand: be aware of the supply side, and ramp up the demand. By hiring a professional that specializes in this approach, you will be assured the most successful outcome.