Untangling the Bidding War: A Buyer’s & Seller’s Perspectives

In a competitive marketplace, bidding wars become the norm. While this may put sellers in an excellent position to recoup on their investment, it can push buyers beyond their budgets and test their temperaments in the process. As an agent, how do you navigate both sides of the coin? After all, you want to net the best results for your client—regardless of which side of the closing table they’re on. To fortify your approach to a heated bidding war, here are a few ideas and insights to better clue you in on the perspectives of buyers and sellers alike.

Buyer’s Perspective: Emotions Running High? Channel it.

When the market is booming, buyers feel the pressure—especially when affordable inventory is limited. This can create stress, feelings of hopelessness, and impulsivity. As an agent, how do you channel this emotional energy into something positive? Consider asking buyers to put those anxieties and high hopes onto paper. Have buyers outline who they are, why they’re inspired to buy a home at this juncture in their lives, and how they see their lives unfolding once they become a homeowner (or repeat homeowner). Think of it as a letter of intent. Buyers benefit from taking abstract fears and dreams and articulating them on paper. Likewise, this document can serve as a valuable tool during a bidding war. Letters like these can help sellers with multiple offers make a personal, emotional connection with a particular buyer.

Sellers Perspective: Manage expectations.

When multiple offers are rolling in on a property, it’s easy for sellers to get carried away. Numbers are flying, expectations are heightened, and sellers may become hypnotized by higher and higher offers and ideal outcomes. While it’s good to celebrate prime market positioning, it’s also important to maintain an even keel so that your seller’s mind is clear and they’re thinking rationally through their options. Sometimes the highest offer isn’t necessarily the sure thing. Manage your clients’ expectations by leading by example, offering a balanced perspective, and talking them through all potential outcomes so that they don’t only hone in on the best-case scenario. During a bidding war, tensions are running high for seller’s too, who will soon begin their next chapter in another home. Keep a cool head and remind your client to see the big picture, recognize that it’s possible for some offers to fall through, and to sit tight until the closing table has been successfully reached.

Buyer’s Perspective: How do you authentically and convincingly convey your interest?

When ten or so offers are in the mix, it can be hard to differentiate your buyer from the next. While numbers will obviously do a lot of the talking, you’d be surprised how much of a difference a personal touch can make. Some popular approaches to standing out include personal letters—as mentioned above—tailored to the property. Was the property in question a family home for years? You might have clients detail their dreams of raising a family inside those walls, rather than tear the property down and rebuild something to boost the lot’s value. Including a family photo is also a good tact for personalizing letters in a bidding war. Likewise, little gifts included with your offer can speak volumes about your personality and due diligence as an agent. It may seem a little cheesy, but when sellers are looking at ten near-identical offers, those personal touches can really paint a compelling, personalized picture.

Seller’s Perspective: How powerful is cash?

Data shows that cash offers—typical of investor clientele—double the chances of having an offer accepted. This goes hand in hand with waiving a financing contingency, which also helped boost the probability of an accepted offer, according to research. Cash is king, however, since offers that aren’t completely reliant on comprehensive financing seem to minimize risk for sellers, who are already eager to see a deal go through. Cash deals also tend to go through quickly, freeing sellers up to pursue their next property and move on to new horizons. While not every buyer has the ability to operate in cash, it’s a worthwhile consideration for those in ultra-competitive markets and with liquid capital.

While the bidding process can be stressful for agents and clients alike, it’s important to remember that it’s a time of opportunity, too. If you want to make the most of it as a seller, data shows that a personal touch can endear buyers to their seller counterparts. For sellers navigating a competitive process, it’s important to keep a balanced perspective. For agents, here’s the bottom line: get creative, be resourceful, and use all the tools in your arsenal to achieve the best result for the clients you serve.

Michael Coleman

With a personal experience of relocating approximately 30 times, Michael possesses a deep understanding of the needs and desires of both buyers and sellers. This expertise has propelled him to become one of the most successful real estate brokers in the fiercely competitive luxury real estate markets of Boulder and Denver. From an early age, Michael fostered a passion for real estate as he accompanied his entrepreneurial-minded parents on their numerous moves, actively assisting them in finding their next home for their exciting ventures. At the age of 18, he immersed himself in the industry and began reselling properties. After living in various locations, he ultimately found his calling in Denver, Colorado, where he now works as an independent agent for milehimodern, a top luxury real estate agency.

With an impressive sales record exceeding $15 million in the past year, Michael attributes a significant portion of his success to his strategic utilization of targeted marketing techniques. He emphasizes the importance of carefully selecting his target audience when listing his clients’ properties. His advertising efforts focus on mediums specifically tailored to attract potential buyers who align with the unique characteristics of each property. For instance, he plans to organize invitation-only open houses and exclusive events with a luxurious flair, catering to influential brokers who have potential clients. Furthermore, he leverages local publications like Cherry Creek Magazine and invests in retargeted advertising on popular social media platforms such as Facebook and Instagram.

Michael’s affiliation with milehimodern provides him with access to a wide range of marketing resources, including a substantial database and an in-house copywriter. Recognizing that effective marketing plays a vital role in the responsibilities of a real estate agent, Michael asserts that top-selling agents must possess strong marketing skills.

When asked about his favorite aspect of the job, Michael’s face lights up as he expresses his genuine pleasure in witnessing people’s excitement when they find their perfect home. He encourages his buyers to take their time in exploring a house, understanding that a genuine emotional connection indicates the right fit. Being part of his clients’ next chapter and guiding them through various scenarios to alleviate their stress levels brings him immense satisfaction, as he firmly believes that people cross paths for specific reasons.

Michael’s commitment to the real estate industry extends beyond his professional role. He actively participates in numerous industry-related organizations, including the National Association of Realtors, the Denver Metro Association of Realtors, Who’s Who in Luxury Real Estate, and the Luxury Listings Specialist Network. Additionally, he cherishes the time spent with his two beloved miniature dachshunds, whom he spoils and adores. His affinity for dogs drives his support for the local Dumb Friends League Animal Shelter.

It is evident that Michael’s passion for his work and dedication to his clients define him as a consummate professional and broker. He wholeheartedly embraces his chosen career path and cannot envision himself pursuing any other vocation. Undoubtedly, the residents of Boulder and Denver are deeply appreciative of Michael’s invaluable contributions to their real estate endeavors.