New Jersey Real Estate News
KAREN'S BLOG: What should you do if you're in a bidding war for a new home?
I read an entertaining article on Bloomberg.com this week, pointing out the increasing lengths that some home buyers will go to in order to win a bidding war over that new home they want. These included undisguised flattery, personal appeal letters, YouTube videos, and baked goods - including homemade pies (that's one pie at the signing, and another at the closing).
The most surreal, though, was an offer letter written in the voice of the family dog.
But even Fido's plea was beat by the most bizarre tactic I've heard of yet, where a pregnant woman offered her first-born child as a namesake.
I've been a real estate agent here in New Jersey for over a decade, but I have yet to have one of my clients come to me and say they wanted to tempt a seller with homemade pies, or to deliver their offer through their dog!
All joking aside, according to data from Redfin Real Estate, during the first half of this year, letter-writers were 14% more likely to have an offer accepted. However, what may work in one part of the country may not work in another. And my own professional experience has been that if you're in a region like North Jersey (including such towns as Edgewater, Englewood, Englewood Cliffs, and Alpine), sellers are typically much more interested in a buyer's ability to obtain prompt financing.
Nevertheless, while it is a high-stakes financial transaction, home buying and selling is a process that is not without its emotional elements. According to Professor Jared Curham of MIT's Sloan School of Management, people are prone to incorporate "subjective value" in home-buying negotiations, and that such a "love letter" from a buyer "can signal to a seller that the buyer is someone they think they'll be able to work with through the closing process".
My own take on this is that it is ultimately in the hands of the buyer's real estate agent to have done enough sleuthing and thoughtful consideration to determine the best approach to appeal to a seller's subjective side.
An insightful real estate agent is in the best position to have access to "inside information" about the seller's personality, and to therefore know what non-financial factors might appeal to them. Plus, your real estate agent will know how best to ensure that such a buyer's letter finds its way successfully to the seller (although there is of course no guarantee that it will actually be read).
It takes a good Realtor® to know the best approach to follow when it comes time to make the offer. This is where an agent's sales and interpersonal skills are critical. Not all offers should be presented the same way, and the seller's agent is tasked with helping their client make the right choice in the offer they accept - and that's not necessarily the one that comes with a gimmick attached. Personally, I rely on my 30 years of experience in sales and marketing to know not only how to promote my qualified clients to a seller, but to also recognize when there are other criteria that will help "seal the deal".
So, go ahead and consider the possibility of using a personal appeal letter. Just remember, however, to consult with your real estate agent on such an approach. A bidding war is an area where the knowledge, experience, and just plain people skills of your agent will likely be the determining factor in your chances of prevailing. And you're probably best off overall if you name your first-born after one of your parents!
Have you, or has anyone you know, tried any unique methods of appealing to a seller? Please share them in the Comments below! You can also comment on my Facebook page, or tweet me on Twitter.
(Photo attribution: Dan Parsons)
Karen DeMarco is a Realtor® in northern New Jersey just outside of New York City, and concentrates in the representation of buyers & sellers of exclusive, luxury properties
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