The competition is heating up for homes priced for less than $3 million in Los Angeles County. The number of properties sold at that price point rose by 1.4 percent last year, while the average number of monthly active listings declined by 12.2 percent, according to the California Association of Realtors.
As a result, agents said they typically expect anywhere between four and eight offers for a desirable property, something agent David Kramer of Hilton & Hyland in Beverly Hills refers to as “going to war.”
Winning a high-pressure bid battle can often come down to nuance. Agents on both the buy and sell sides of the deal shared their winning strategies for coming out ahead in the ultracompetitive L.A. home market.
A buyer has to be prepared to make the strongest possible offer. That means being certain it’s the right house for them. Kramer makes sure his clients view a home more than once. “What I find is hesitation often comes from not remembering the house. You see it once, get excited, and write the offer,” he said. Confidence also comes from being informed about comparable sales in the area and what it takes to sweeten a deal in a bidding war, like shortening or waiving contingencies.
2. First impression.
“When your client walks into the open house, this is an interview,” said Michael Nourmand, president of L.A.’s Nourmand & Associates. “The agent is watching your client – what they say, how they appear, if they seem easygoing. Do they really like the house?” In a hot market, Nourmand tells his clients to “be very complimentary about the house because you want to sell to the listing agent that you really want the house and that your buyer is going to close.”
3. Escalation clause.
Some might view it as an unfair tactic, but adding an escalation clause helped one Nourmand buyer win a bidding war for a home that sold for just less than $1 million in Studio City with six offers, he said. “What it means is that I will pay (for example) $5,000 more than the highest written verifiable offer, purchase price not to exceed $1.5 million.” Nourmand suggests calling the listing agent to see if he or she is OK with the escalation clause first.
4. Level the playing field.
Kramer suggests asking the listing agent if any of their own clients are submitting bids. If so, “they’re going to pick that person.” If that’s the case, then ask to bring the selling broker’s manager in. But don’t stop there, he said. “Another thing I ask – Is there anything special that is nonfinancial that will make this seller happy?” Learning about a seller’s specific needs and addressing them means that even if you don’t have the highest offer, the seller might tell you what the highest offer is and give you a chance to match it.
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