Agent Strategies for Winning in a Hot Market

It’s hard to beat all-cash offers as a winning strategy for buyers, but other approaches built on empathy, persistence, creativity and flexibility also can get buyers over the threshold.

Zillow surveyed 376 Zillow Premier Agent partners in early spring about the strategies they used or encountered in their last three to five transactions as buyers’ and listing agents. While cash topped the list of effective strategies, more than half of the listing agents surveyed named a different tactic as the most effective strategy. 

The survey affirms that there is no one-size-fits-all solution for buyers, but there are four effective strategies to help your client’s offers stand out.

1. Persistence

In the six months prior to the survey, agents on average submitted nearly four offers per client before one was accepted — and 13% said it took an average of six or more. 

You’re undoubtedly aware of the emotional toll that can take on your clients, and how it can drive some buyers to consider dangerous strategies after losing multiple offers. You can build your clients’ resilience by sharing the data with them, letting them know that making multiple offers is common right now and not a personal failing. You also can assure them that home shoppers are still finding homes to buy despite the competition.

2. Demonstrate financial strength

When you’re up against all-cash offers — as many buyers are — it helps to bring a different kind of financial strength to the table. If your clients can’t pay all cash — and most can’t — look for other ways to show that your client is well-qualified for the purchase, is prepared to compete and is serious about the property.

At least half of listing agents surveyed said they encountered an all-cash offer, an escalation clause, submission before the offer review date, higher down payments or more earnest money when reviewing offers.

Not surprisingly, all-cash proved to be the most effective strategy in the recent transactions surveyed. But only 41% of listings agents cited it as such, which is surprising given that buyers often talk about being unable to compete against cash. Clearly, they can.

Most agents (77%) said they sometimes submitted all-cash offers on behalf of their clients. But other strategies were popular as well.

About 21% of buyers’ agents said they always helped their clients’ offers stand out by offering higher down payments or more earnest money, and 24% always submitted offers before the review date. These strategies show intent and interest, and can reinforce the notion that the buyer is well qualified and committed. 

3. Sweeten the offer

Some of the more unconventional strategies reported by agents in the survey speak to the role of empathy and the importance of humanity in the transaction. 

Those strategies included:

• Offer a lease-back arrangement. Since 63% of sellers also buy, a lease-back takes away some of the uncertainty they may feel about finding a home in such a competitive market. Giving them some flexibility and time to find a home could make your offer more attractive than one promising a fast close that the seller might not be ready for.
• Sending flowers to the seller. It could come off as a ploy or it could be a way for your client to show their sincerity and for their offer to stay top of mind.
• Throwing a pizza party. Because… pizza!

4. Use technology to focus the search

Technology that allows buyers to tour homes remotely allows buyers to hone their preferences and put their greatest energy into making an offer on a home that really speaks to their needs and preferences. Real estate professionals like Josephine Sabatino said tools such as 3D tours and virtual showings can help buyers move more quickly if they see a home they love.

What to avoid: Buyers assume big risks by waiving contingencies

At least half of the listing agents surveyed said they encountered offers that waived inspections or financing contingencies — practices that can pose a huge risk to buyers in the short and long run.

• Forgoing an inspection can put buyers at risk of structural, mechanical or safety defects that are costly to repair or remedy.
• Waiving financing contingencies can put buyers on the hook to bridge any gap between the appraisal and the sales price. Or they may have to walk away from their earnest money.
• Writing so-called “love letters” to sellers may put agents and sellers at risk of fair housing violations, since they can include information such as personal demographics that could unlawfully impact a seller’s decision. The listing agents surveyed also said such letters aren’t particularly useful. Among all strategies, they ranked the least important factor for sellers.

Agents are key to a winning strategy

The intensity of the competition, a buyer’s personal circumstances and varying conditions in local markets underscores how much buyers need agent expertise to help their offers stand out. 

They’re counting on you not only to craft a winning strategy but to keep them motivated when they encounter obstacles so they can successfully unlock their next chapter.

Methodology

Data came from a survey of 376 Zillow Premier Agents who are part of a research panel. Fielded between March 26 and April 1, 2021, the survey asked respondents about the strategies they used or encountered in their last 3-5 transactions as buyers' and listing agents. To make the sample more representative of the overall real estate agent population in terms of age, sex, race/ethnicity, and geographic region, Zillow Group Population Science used statistical ranking to weight the sample to 2019 U.S. Census Bureau American Community Survey benchmarks. However, additional differences between the surveyed agents and agents overall may persist, particularly with respect to transaction volume, local market, and other relevant factors.