- The Washington Times - Friday, April 19, 2002

Besides the common problems with a seller's market not enough inventory and too many buyers there's also the problem that a house can actually sell for too much. This can happen when a contract price exceeds an appraisal from the bank. When this occurs, the buyer must come up with the difference or the seller must reduce the sales price down to the appraisal.

Apart from taking the above noted actions, buyers can beef up contracts without going over the appraised value of a property and having to renegotiate the contract or resulting in a failed contract altogether.

These strategies may include using monetary and nonmonetary offers in the contract. I recently attended a panel discussion on multiple contract offers and how agents and brokers can compete in such an environment. The record was 30 contracts on one house over a weekend. The brokers were from three states, Virginia, Maryland and the District, and they have seen just about everything that buyers can throw at the sellers to become the new homeowner.

In one winning contract, it wasn't the sales price alone and bottom line to the seller that brought the contract to the top but the offer to stay in the buyer's Florida condo for a week after settlement. Quite clever. Kudos to this buyer who used a time-honored strategy used in a buyer's market. Most times, it has been the sellers who offered unusual attachments to the contract instead of the buyer, but now the tables had been turned in this marketplace and the creative-minded buyer is the purchaser who won.

Another addendum that could be used is to offer a bonus to the seller instead of a larger sales price. Keep in mind that the loan program may not allow this, but check with your mortgage provider first. Simply, if you know the house will only appraise for $225,000 then it's a waste of time to offer $235,000. If you have the extra $10,000, then offer it in the contract as a bonus to the seller, rather than making it a part of the sales price.

Meeting a home seller heart-to-heart is a strategy, but also a relationship angle, to winning a contract war. Many home sellers don't care that they received $5,000 more from one buyer over another. It could be that if they feel good about the house purchaser, that could be a selling point.

One family wrote a letter to the seller explaining how this home was perfect for their handicapped child and that it would meet the family's needs so well that they hoped the seller would consider their offer.

After it was verified that the family, indeed, had a handicapped child, the seller was touched deeply that the house he had worked on for so many years would serve this family perfectly. The contract won.

Letters to the seller are a nice touch, but keep in mind this is not a time to give the seller a biography on the family, while providing a dissertation on each child's interest and likes about the property. Just explain how the house fulfills your dreams or needs and what particularly drew you to the house. I would definitely "compliment" the seller on the upgrades, color selection, addition, etc. If you don't really believe that about the house, then don't write it. This is not a time for unadulterated kissing up but a time to explain why you want the house, not just that you can afford it.

One buyer won her bid by writing a strong contract and then had flowers that matched the dining room decor delivered right at the time their buyer agent was conducting the contract presentation. This was the homey touch that took the contract over the edge. The sellers felt the contract was competitive and that the buyers truly cared about their home.

When it comes time to write the contract, have your agent call the listing agent and find out what the sellers want. It sounds obvious, but too many agents just write from a left-brain, analytical perspective. If you find out when the sellers move, why they are moving, where they are moving, whether they are retiring and whether they could use some money for a vacation or a rental car these issues may be what could win the contract.

There's a difference between selling to someone who plops down a bunch of money vs. a buyer who takes an interest in where you're going and what you're doing after the sale is complete.

The bottom line financially is not always the bottom line. Make the effort to find out what the seller really wants and go for it.

M. Anthony Carr, director of communications for the Northern Virginia Association of Realtors, has written about real estate for more than 12 years. Reach him by e-mail ([email protected]).


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