"Round Robin" Buying System. Save $5k-$25k. Unearthing The Desperate Seller.

By
Real Estate Broker Owner with Northern Virginia Homes - FRANKLY REAL ESTATE Inc

Frankly, buyers say they want a good deal, but oftentimes they aren't willing to go through the emotional roller coaster the buying process can put them through. A good Realtor will try to shelter the buyer from stress, but inevitably it is up to the seller and their threshold for being aggressive.

For the most part I don't really believe in the idea of a "Good Deal" (see post Buyer's Market?" No Such Thing As a "Good Deal" ), but you can get a better deal if you are open to being flexible and buying with your mind (and agent) and not with emotions.

Too often I find buyers that want an aggressively low price, but then they fall in love with one place and they fold their cards rather quickly.

Reintroducing the non-patent pending "Round Robin" buying approach that I initially touched upon on 1/5/07 Tip #1 From Mom: Don't Trust Realtors That "Sell" You On Buying.

I learned from my mother that you never know the situation or needs of the seller. Some might be pressed to sell quickly for they fear the market is getting worse, or are approaching a foreclosure. Meanwhile others might have the mentality of "If I don't get what I want, I'll just rent."

How do you know which is which? Ask them (indirectly), one by one.

Round Robin System

  1. Be flexible. Find two or three homes that you like. Don't think in terms of whether you like them at X price, think in terms of "I'd prefer house #1, but I'd consider ABC is it was $X off"
  2. Put in ONE offer. Let that agent know that you have 2 or 3 properties and you would like to first offer on their property. (Ethically you can only put in one offer at a time. Even if you have "outs," your contract has to expire or be countered (a counter nullifies the initial offer) before you can move on.)
  3. Review counter or accepted contract. The seller can a) accept, b) reject or c) counter. If the counter is something you want to work with, keep it alive. Otherwise
  4. Move one, offer elsewhere. The negotiation isn't over, but you tell the listing agent that you will now offer on another property. And since your client can't make two open offers, the listing agent is still invited to re-submit. I like to end with a "we may or may not come back in a few days if the other houses don't work out.

    Sidenote: Why would I reveal my strategies? A listing agent might be reading? GREAT! Then they know I'm serious when I say we are offering elsewhere and may or may not come back.

  5. Repeat as necessary (are you really supposed to "shampoo and repeat?") with a slightly higher price, until somebody bites.
Again, this technique isn't for everyone. It might sound sexy to be aggressive and all your officemates might talk about "lowballing" and nobody wants to overpay, but if you want that extra $5k- $25k, be prepared to spend $5 on some sleep meds.

Love to get your comments. Do you do this? Do your clients have the stomach for it? Do you consider it unethical?

Written by Frank Borges LL0SA - Broker FranklyRealty.com

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Rainmaker
135,325
FRANK LL0SA Esq.- Northern Virginia Broker .:. FranklyRealty.com
Northern Virginia Homes - FRANKLY REAL ESTATE Inc

Charles- I would say that only 30-50% of my clients are up for the Round Robin approach. From that 65% get the first house, 25% get the second house and 10% get the 3rd house.

 Jennifer- Yep, only one active contract offer out at a time. Many would rather just send three at once to speed up the process. Can't do that!

August 20, 2007 03:20 PM
Ambassador
894,389
Missy Caulk
Realtor - Ann Arbor Real Estate
Missy Caulk TEAM
Frank, great information. It always gets me when I have to tell my sellers that they have 3 houses. It does make them be serious. Can you tell I mostly list ?
August 20, 2007 06:47 PM
Rainmaker
111,562
Tracey Thomas
CA Real Estate Broker
BrokerInTrust Real Estate
This is a great way to help buyers diffuse some of the emotion when deciding which house to buy
August 20, 2007 08:19 PM
Rainmaker
138,711
Cindy Abel
Broker/Owner - Las Vegas Homes and Real Estate
Southern Nevada Realty, LLC

I do this.  I think it helps buyers to make a decision; focus during showings; and speeds up the process.  I just finished one where we didn't get the first one and moved on to the second (got it).  The listing agent for the first one called me (right after we received the counter on our second offer) and told me her sellers were willing to go 5K less than their recent counter offer.  

Of course, I always give my clients the option of doing this type of thing.  If you have someone who is "not in a hurry to move" this is a great tool - gets them excited and motivated.  

Great post!

August 20, 2007 09:24 PM
Rainmaker
86,081
Paula Henry
Realtor - Indianapolis Real Estate - 317-605-4174
Home to Indy Team @ Sycamore Group Realtors
Frank - On my list to try..............I like it better than submitting multiple offers. Just this week, I had a seller's agent call; their client wanted to reconsider my clients previous offer. It was too late.
August 21, 2007 01:06 AM
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FRANK LL0SA Esq.- Northern Virginia Broker .:. FranklyRealty.com

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