One of the best feelings, as a real estate agent, is seeing the excitement on buyers’ faces when they find their dream home. Walking through the property with them, you watch it all click into place. You see it when they start picturing their stuff in every room.
Once your buyers find and make an offer on their dream home, the next step is the waiting. You hope for good news, but sometimes it doesn't go their way. Then you have to tell your buyers they didn’t get the house. It can be devastating.
As their agent, it’s hard to be the bearer of bad news. Thankfully, there are ways in which you can soften the blow and help buyers get back on their feet. It's your job to get them to continue the search for their real dream home. The one they're meant to have.
Manage expectations from the start
Even before a home search begins, it's good for buyers to manage their expectations. If you’re working in a market where you know there’s a lot of competition, give your buyers a heads up. If you believe the offer they want to put in is too low, try to convince them to add on a few more dollars. You’re the expert in real estate, not your buyers.
As much as buyers love a particular house, you can control how realistically they approach an offer by sharing key details such as:
- The potential for a bidding war. If you're in a competitive market, it could be harder to negotiate from your initial offer price if it's not strong.
- Staying competitive means putting in an offer at or even slightly above the asking price.
- Asking the seller to pay any of your expenses at this stage could be a real turnoff.
If there are ways for your buyers to sweeten the pot, by capping the inspection or offering up any other concessions, make sure to let them know. These might not be things your buyers want to do, but it will help them better understand what “went wrong” if they don’t get the house.
Tell your buyers the truth
After an offer gets rejected, rather than lay blame on any one person or choice, it’s best to tell your buyers the truth. It’s okay to say, “Your offer just wasn’t high enough,” or “Too many other offers beat us out of the running.” Buying real estate is a competitive process, but we can learn from our failures.
After delivering the truth of what happened, flip the switch. Give them ways to prevent it from happening again. Suggest they develop a new strategy of looking at listings as soon as possible to get their offer in first. Encourage buyers to not try and low-ball their first offer in the hopes of getting a deal on the house. Help them take the right steps to stay competitive as they continue their search.
Make adjustments to the process
To avoid multiple dream home losses, encourage your buyers to make adjustments to their overall house hunting strategy. If buyers are only looking at homes toward the top of their budget, but are losing out because bidding wars take them out of contention, shift the price range. Start showing them homes that lean toward the lower end of their budget. This provides leeway to get into a bidding war with a higher chance of success.
You can also suggest your buyers put in their initial offer with an escalation clause. This enables them the chance to be immediately competitive. The clause allows the buyer to offer a certain amount of money above the highest offer that comes in, up to a specific cap. Then it’s not a dollar-to-dollar war you’re guessing at how to win.
At this stage, you may also want to encourage your buyers to reevaluate their priorities for their new home. If what they’re looking for is too hard to find, maybe they are only setting themselves up for disappointment.
You can help them refocus their wants for a home by asking them to think about the exact features they can’t live without. Having them remove all the items it would be great to have, and just leaving a list of true wants could make a lot more homes fit into their ideal category.
Provide insight into the realities of real estate
When all is said and done, losing a dream home isn’t as major as buyers may feel it to be. Any home that hits about 80 percent of what they're looking for could make a dream home list. It’s almost impossible to find everything a buyer wants in a single home, so remind them of how many potential dream homes are out there, especially if their wants are more common features in the market they’re searching.
Fight bidding war fatigue
You also want to acknowledge that buying a dream home in a seller's housing market is tough. Too many lost dream homes can lead to bidding war fatigue. This can grow into burnout and discourage buyers from continuing their search. You can help ease your clients’ bidding war fatigue by adjusting your approach to the offer process.
- Deliver the offer in person to show how serious your buyers are.
- Ask the buyer to write a personal note with the offer about why this is their dream home.
- Submit a copy of pre-approval for the mortgage.
These may not push you to the top of the list when it comes to your offer, but it can add that extra dimension to give you an edge. It may make the difference if other offers are all coming in around the same dollar amount.
Get buyers back out there when they’re ready
Remember, when buyers lose a home it’s a very emotional experience. They may need time to grieve the loss while thinking through how to proceed. You can be there for them as they feel the disappointment and frustration. You can encourage them to take a step away from the house hunting process and let you do the searching for them for a bit. You’ve equipped them with a strong understanding of the market and their expectations to make things go differently in the future.
Then, when they’re ready to pick up the search again, so are you. You can remind them that it's still a good time to buy and help them find the next house with the potential to be their dream home.