On the surface, it seems like a great problem to have. Offers are coming thick and fast so making a sale seems like a slam dunk. It is important, however, for a savvy sales agent to consider the bigger picture and play the long game even in a fast-moving market.
In a multiple offer climate, for every successful buyer there will be a handful of frustrated (and potentially very disgruntled) buyers who won’t forget the dream home they missed out on, or the agent who listed it.
Keep buyers in the loop
Buyers will always remember how an agent treated them when multiple offers were rolling in on their dream home during a hot auction campaign.
“Running a really complicated hidden pre-auction process tends to really annoy buyers. If you’ve got multiple seriously interested buyers, you’ll obviously have one lucky winner, but then there will be plenty of frustrated buyers that miss out and it’s likely those people might not have anything good to say about the process,” said Peter Chauncy, committee member of REINSW’s Residential Sales Chapter.
“The best way to deal with multiple offers on a property that’s hugely popular is instead of potentially running an auction behind the scenes, bring the auction forward so you can keep the process transparent for the buyer,” he added.
Mr Chauncy, of McGrath Crows Nest, said he has been bringing auctions forward in recent times and found that buyers are mostly willing when they know and understand why an agent and owner would do it.
“It means all those anxious buyers don't have to wait a prolonged period to find out whether they're going to buy a house, or move on to the next one,” he said.
“You do get the odd buyer who says, ‘Look, I'm making you an offer and you can either take it or leave it’. If that's the case, and the buyer is really prepared to make a knockout offer, that’s when there could be a way forward by selling a property prior to auction,” Mr Chauncy added.
Betty Ockerlander of McGrath Epping, and fellow committee member, agreed that open communication is vital when juggling multiple offers.
“If buyers are upset, it’s usually because there’s a lack of feedback; the agent not coming back to them and telling them what’s changed. It's important to keep the buyers updated if the price guide changes also. They just want to be told, this is where we're at,” she said.
“But at the same time, I also inform each buyer that they can't just come in with what they think is an offer that can’t be refused and think I’m not going to go back to other buyers. That isn’t fair or transparent,” she added.
Educate your sellers
To avoid vendor confusion or anxiety, Mr Chauncy said an agent can gain trust by keeping them up to speed with market conditions from day one.
“I always say to my vendors that the best problem we could have during the course of their campaign is being in a situation where we decide to bring an auction forward,” he said.
According to Mr Chauncy, vendor preparation is the key to success.
“I discuss with the vendor all possible scenarios that could pop up over the first two weeks of their campaign. I get them ready before, so if changes happen, they’ve already had time to think about it,” he said.
“Agents can go wrong when they tell their vendor one thing and then suddenly bombard them with another idea. Their vendor can then be incredibly taken aback, anxious and probably stressed out. That’s when they worry they're doing the wrong thing and potentially make the wrong decision,” Mr Chauncy added.
Consider the future
Ms Ockerlander said a switched-on agent recognises that a buyer on one property, will often become a vendor (and potential client) on another home in the same neighbourhood.
“I think many agents forget that. I’ve spoken to a lot of buyers who tell me they’ve seen from the other side how certain agents work and they’ve told me ‘There's no way we want to sell our house through them’. I've heard it again and again,” she explained.
“A lot of agents just look for the short-term gain of a commission instead of looking at the long-term relationship. I’ve been doing this for many years and for me it's always been about the long-term relationships. People will come back years later, or refer friends, because they know I did the right thing by them, and I'll do the right thing again,” Ms Ockerlander said.
“It's a standard recipe for success. Treat everyone how they deserve to be treated.”
What’s real, what’s not
When multiple offers are in the air in a fast-moving market, Ms Ockerlander said agents should also establish if all offers are genuine.
“Unfortunately, sometimes they're not. The offers can be from a buyer - and this can be hard to ascertain - who is gauging how much a certain house will go for, and what price a vendor will accept. It’s usually because they really like another home that might be going to auction earlier than your property. They could be pretending to put in an offer on your listing with no real intention of going ahead,” she said.
An agent can protect themselves, and their vendor, from a false start.
“I like to get my offers on a signed contract with a 10% deposit cheque and 66W certificate, then I know they're real. When they're not forthcoming with that I know that they were just trying to feel out what the owners will take,” Ms Ockerlander said.