Here in Dallas, multiple offers are becoming the norm as opposed to the exception. Last week I posted about how to generate multiple offers utilizing the eBay mentality. Well, grab a frosty beverage and sit back and relax, because today I wanted to walk you through one of my last listing appointments and show you how I explain multiple offers and the eBay Mentality to potential sellers.
After going through my listing presentation, on came the discussion of pricing.
Me: Mr/Mrs Seller, you have looked at my market analysis. According to that, it suggests that the potential sales price based on your location, size, and the condition of your home will be somewhere between $325,000 and $350,000. Where do you think you would like to list the property?
Mr/Mrs Seller: Well at $350,000 of course.
Me: Your answer is not unexpected at all. In fact, that is what nearly everyone says when I give them that option. But before we put the price on the listing agreement, would you mind if I showed you something on the computer? Is there anything that you have been considering buying recently?
Mr Seller: Well, I’ve been considering upgrading my phone to the iPhone 5.
With that, I log into Ebay and do a search for iPhone 5.
Me: Mr/Mrs Seller, you will notice that on the first 4 listings here, 3 of them have no bids. 2 are new listings, so we won’t count those. But look at the middle 2. Both are about to end. One is priced at $419 and has no bids. The other is at $455 and has 11 bids. But if we look a little deeper, lets look at the bid history of those 11 bids.
Me: You see, the seller started the bidding all the way at $385, and it has been bid up by multiple buyers all the way to $455. The seller who listed their phone at $419 still doesn’t have any bids. This is what I call the Ebay mentality.
Me: People love to compete. Actually, they don’t LIKE to compete, but they LOVE to win if it turns into a competition. This is what I would love to see happen to your home. But just like here with the iPhones, if you price your property too high, you may not get ANY bids or you might just get one. Instead, if you follow the path of the other iPhone seller, you can start your property off low and generate multiple offers, turning this into a competition between buyers.
Me: And just like with this Ebay example, you may start the bidding off low but if you can generate multiple offers you may end up selling for a higher amount than the person who started their pricing higher. We can even do like eBay does and say that we won’t consider any offer for the first 5 or 7 days. Does that make sense to you?
Mr/Mrs Seller: **nodding with an unsure look**
Me: I know, this is totally different than what you normally see in real estate. But it is not totally different. Banks do it all the time because it generates a ton of interest and multiple offers in a short amount of time and brings the highest possible price. That’s also why forclosures are sold at AUCTION, because it becomes a competition. Besides, this is YOUR home. If there is not an offer that you want to accept, you don’t have to accept.
With that, the home was listed for $330,000 with no offers being considered for the first 7 days. 7 days later, we were under contract for $352,000 after having received multiple offers, most over list price. That, my friends, is the power of the eBay Mentality and how to generate multiple offers using it. Enjoy, and send me a thank you note when you close your next multiple offer deal.
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