A Buyer’s Agent in a Seller’s Market

The Art of Drafting a Strong Offer

by Kenda Ruck

I love being the buyer’s agent. I get to help people find amazing hidden gems, lucrative investment properties, and dreamy family vacation homes. A good buyer’s agent must be patient, listen very carefully to their clients’ comments, and invest time in building relationships; and these qualities are right up my alley. I’m a buyer’s agent at heart.

I live for the moment I see my buyer’s eyes light up when I have found them a property that speaks to them. They start talking about upcoming holidays with family, what new art they will bring in, or how their renters are going to love the experience. I can literally see their mind painting the walls or cooking a meal. When it is the right place, they know it.

Recently, the market in Los Cabos has shifted. Due to COVID 19 and other factors, many people are realizing they can work from home, and their kids can go to school from home. People are traveling more and even relocating, many to our amazing Los Cabos. As a result, the inventory of available properties has shrunk, and the demand for vacation homes has grown. When this happens, we enter what we call a Seller’s Market.

For the first time in maybe ever, properties in Los Cabos are receiving multiple offers within days or even hours of going live on the MLS. The days of low-balling a seller like you may have seen happen on shows like House Hunters International are long gone. If you are looking for property in Los Cabos, there are a few key things I tell my buyers to put them in the strongest position to win a multiple-offer scenario.

Here are a few of my tips:

1. Make sure you are ready. You have to be ready to move fast and have money ready to transfer into escrow before you start looking at properties. If you have another property to sell, need to apply for mortgage approval, or have to get money out of investment accounts, you should do this prior to looking at properties. For a seller to take your offer, they want the assurance that you will put down significant funds right away.
2. Work with a good and knowledgeable agent. I am very familiar with the market values in many different neighborhoods. You should make sure you are working with a real estate agent who understands the brisk market, current values, AND how to coach a listing agent. This means more than asking your agent to do a Comparative Market Analysis or CMA. Anyone can do that, but in a market where prices are changing rapidly and homes are being sold off-market and not properly reported, your agent needs to know a lot more than a Comparative Market Analysis tells them. A very important part of being represented by a real estate agent is having someone who will properly advocate for you and your purchase. The squeaky wheel gets the grease, and this market requires an agent who is relentless, available, knowledgeable, and has a knack for finessing the negotiation with the listing agent.
3. Shorten or Waive Due Diligence. Offer to waive (or greatly reduce) the due diligence period and go right into earnest money. This means that the funds you deposit into escrow are non-refundable, which gives the seller the assurance that you are committed. This sounds a bit scary for a buyer, but if you are the seller and you are looking at five similar offers, the one with the most to lose often gets attention. If the seller is going to turn down the other four offers, they at least need reassurance that they will get some monetary compensation out of it.
4. Waive all contingencies, including the right to an inspection. Getting inspections scheduled and completed takes time and often, sellers do not want to take their property off the market to wait to see if you will proceed with the purchase after an inspection. You may still want to get an inspection, but do not make the purchase contingent upon inspection results. If the property looks like it is in good condition, it might be worth waiting until after closing to get it inspected. Remember that labor is very affordable here and if the home you found is your dream home, having minor repairs done after you take possession is definitely worth it.
5. Offer at or slightly above the asking price. Most below asking price offers are overlooked, even if the terms are great. Most sellers start with the price you offer and then look at terms later, so grab their attention right away. I often ask, where would you start if you knew this would be a multiple bid scenario.
6. Keep emotions out of the equation. This also circles back to tip #2 about working with a good real estate agent. I often ask my clients what their absolute top price is ahead of time so I can keep them in check if a bidding war unfolds. Stay rational and rely on your agent’s expertise.

These are a few of the options I offer my clients (Don’t worry, I have kept a few secrets up my sleeve). Not all of them are right for every scenario, and you should carefully consider and discuss the ramifications of each.

If you would like to talk more about the ways I support my clients, reach out to me. I would love to connect with you.

Please send me a message below, or go ahead and send me an email at kenda(at)FINN(dotted)group – I can’t wait to catch up!

Thank you for reading,