How Do Sellers Choose Their Buyers?

The terms of a buyer’s offer are all considered carefully by a seller when choosing whether to accept an offer or not. In addition to the price, a buyer’s offer can include contingencies and terms. Usually, an offer with little to no contingencies is considered to be stronger candidates. A seller also wants the buyer with the best terms. Depending on the seller’s situation, the buyer’s flexibility around the closing date could also play a big factor. After all, in the real estate game - timing is every bit as important as location. 

Another interesting point to note here is that numbers don’t always mean everything. This may come as a shock to most, but the buyer with the highest bid doesn’t always get the home! Here’s why.

Just because you have found “The One”, and offer the highest price, doesn’t mean your dream home’s seller will pick you by default. With money aside, there are a number of characteristics sellers look for when picking the right buyer. Locking down a dream home doesn’t always mean offering the highest bid or cash upfront.

There Is No Price Tag On Emotions

There’s one thing that sets commercial real estate transactions from residential buying and selling, and it all comes down to one word: Emotions. There’s a certain emotional attachment to the buying and selling of a home, which means that people tend to like to do business with those whom they like and trust. Emotions are priceless. When someone is selling a home that has an emotional pull - maybe they grew up in that home or it is the home their children were born and raised in - there’s a natural unspoken price tag, one that is ultimately priceless to some degree. Don’t be mistaken that money is not important. Offering the right bid can make or break your deal but how the seller ultimately feels about you as a person can be even more crucial in the deciding factor. Treat a seller’s home with respect and don’t insult the many things you hate about the place and what needs to be changed in order for you to give a good price. Nothing infuriates a seller more than disrespect and insensitivity. 

This goes the same for landlords who are leasing their homes out. At the end of the day, they are renting out a part of their life to a stranger so it’s your job as a renter (borrower) to be friendly and respectful. A less than friendly demeanor could be your deal-breaker. 

When dealing with residential transactions, a seller’s primary goal is not always about profit. There’s a lot of emotions involved with selling one’s home and a higher cash offer does not always guarantee a deal. Some sellers will choose a buyer with whom they have a better connection over cold hard cash. This is why some of the tougher deals often end up as a family purchase in the end. Sellers who have an emotional attachment to a home will be more likely to pass the torch to someone who they believe will take good care of their home as new owners.

In order to up your chances of being picked by a seller, you should aim to figure out the seller’s unique motivation in putting their home on the market. Understanding the reasons why can be a powerful tool in a seller-buyer negotiation. Whereas some sellers just want to get rid of their property as quickly as possible, others are looking for a specific type of person to take over something that means a great deal to them. The intangibles are just as important as the price. Try to find out as much information as you can about the seller. Ask your agent, talk to your seller’s neighbours - the more information you have, the easier it is to come to a mutual understanding that pleases both parties. People make the mistake of using money as the trump card, but throwing out the highest price may not hit the emotional button that your seller is looking for to put his/her mind at ease. Sellers are looking for buyers who are highly motivated to buy the home. How can you as a buyer give the seller peace of mind in handling the property over to you? That is what you need to figure out.

Go Old School And Put Pen To Paper

With the advancement of technology, we forget how a heartfelt personal touch can take you miles ahead of your competitors. Needless to say, trying to negotiate a hot property in a hot market is like spearfishing in shark-infested waters. The competition is fierce and can give a feeling of hopelessness. I mean, how can you set yourself apart when there are already multiple attractive offers placed on the table?

If you really are in love with a home and feel a personal connection to it, it’s okay to let the seller know in a genuine manner. Don’t do it just for the sake of putting yourself at the top of the list only to pull out at the last minute. Do it because you genuinely mean it and would love to be the new owner of the home. It’s difficult to find the perfect home, so it’s perfectly understandable to not want to let the opportunity slip away. 

Even if it feels like a long shot, you can try writing a personal letter to the seller to express your feelings. In a market that's often not very personal, you can easily set yourself apart by acting in a personal way. Personal touches matter, so if you do feel a desire to express your interest in more than just numbers, try putting pen to paper or using other unique approaches to get the seller’s attention. Set yourself apart from the crowd. 

Professional Help Is There For A Reason

A seller’s realty agent is his/her representative, just as a buyer’s agent is his/her face and voice of the negotiation process. Sellers review more than just the quality of the offers, they also review and make judgments based on a buyer’s representation. If the seller and their corresponding agent have had a bad experience working with your chosen agent or don’t like your agent for whatever reason, it can also jeopardise your deal. Talented agents know how to develop and maintain good relationships and work the real estate world with grace. An agent’s reputation is taken into account just as much as your offer is. This is something most people don’t realise or understand. 

Although a lot of people go at it alone, it really helps to have a seasoned pro working alongside you - someone who understands the market well and can work well with the seller’s agent. To find out how to choose a good real estate agent, read our article on “Tips On Choosing A Great Real Estate Agent”. 

As we learned from our very own Michelle Cheng, who has recently joined the Engel & Voelkers Hong Kong Team, smart residential real estate agents know an investment is a balancing game of both head and heart. Smart buyers who have knowledge, strategy, and passion are the ones most likely to win in the real estate world.