A valuable bargaining tool in any market condition, a mortgage pre-approval becomes particularly important when inventory levels are low and interest in homes is high. Digging even deeper, Wheeler talks to her buyers about how much they really want to spend and what the actual payment will be.

Sometimes, the pre-approval amounts and payment amounts aren’t in alignment.

Recently, Wheeler worked with a buyer who was preapproved for a $300,000 mortgage. But that buyer only wanted to pay around $1,400 a month. Once taxes, insurance, and other expenses were factored into the equation, that buyer could really only afford to look at homes in the $175,000 to $200,000 range.

“There’s a huge disconnect,” says Wheeler. She overcomes these issues by talking openly with clients about what they really want to pay for housing and what they can actually afford. “It’s my job to educate those buyers and help them make the best possible decision for their specific situation.”

Kevin Kelly, a broker-associate with Jameson Sotheby’s International Realty says having positive relationships with other REALTORS® goes a long way in helping your buyers get the homes they want at the right price. Off-market or pre-market options, for instance, are often shared by word-of-mouth and only among those agents who work with and trust one another.*

[*LEGAL NOTE: Sellers should authorize this and be informed that the seller’s listing has not been exposed to the “big market.” Listing agents should also make sure all proper disclosures are being made, and any necessary waivers are signed if the listing won’t be going to the “big market”  or local or regional MLS immediately.]

“We’ve seen a lot more of these deals close within the last three years,” says Kelly, who uses a private listing network to maintain a foothold in the off-market and pre-market inventory options. “I use it to look at properties that aren’t in the MLS, but that are going to be coming to market soon.”

And, most local brokerages in Chicago have internal networks that their agents use for intra-office communications.

“I can post to other REALTORS® within my brokerage saying, ‘I have a client looking for a property.’ Maybe one of those agents is two weeks away from getting a listing ready to go and will come back with, ‘I have something, but it’s not on market yet.’ This is a pretty typical way that deals are getting done right now.”

Inspection contingencies and seller concessions are the norm in most real estate markets, but what happens when one buyer has these addendums in her contract, and the next buyer doesn’t? You guessed it — the second buyer will probably win the bidding war, as long as the offer is priced right.

“If your buyer can make the purchase without any seller concessions, it just looks good,” says Wheeler, who adds that in the busy summer market, sellers are entertaining multiple offers but really just want to work with qualified buyers that present “clean,” unencumbered offers.*

[*LEGAL NOTE: Buyers should be referred to their attorneys on this question. For example, it is ill-advised for a buyer to buy any home without a whole-house inspection.]

“I’ve had sellers reject offers that came with contingencies, so try to keep those to a minimum,” she advises. To help buyers strengthen their offers, Wheeler says she studies the true value of the properties before putting in those offers.

“I give them the comps for the community for the last 60-90 days,” says Wheeler. “And make my buyers aware of shifts like increased values, all so they can make informed decisions about their offer and about any contingencies or asking for concessions from the seller.”

Life doesn’t always give us second chances, and the summer selling season can be equally as tough.

To help steel her clients against major disappointments, Wheeler talks to them about their most important wants and needs. She also talks to them about the pitfalls of making offers in a seller’s market, where homeowners are entertaining multiple offers.

“The key is being prepared for the worst and being ready to pounce as soon as they find a home that meets all of their criteria,” says Wheeler, who uses tech tools such as automated listing updates to keep clients informed about changing market and sales conditions.

“That way,” she says, “when I come across a property that fits their criteria for preferred budgets and desires, they can act quickly.”

If there’s one thing that Kelly repeatedly tells buyers these days, it’s that they need to have a plan “B” – or even a plan “C” – before making an offer.

“Let them know that, in terms of falling in love with one property, there’s a possibility that they won’t get that property,” he says. “It’s always good to have another option or two in mind.”

This is particularly important in a summer market, where well-priced properties are going more quickly.

“Let them know that there’s a possibility that they may not get the home they want because other people are competing for it, but that a home in a different neighborhood—or a different property type—may be a good plan B,” Kelly says.

“Help them understand that they’re out there competing on the open market. If you don’t, it will quickly become a confusing and frustrating place for them.”

As he looks around at how the market is shaping up for 2018, Kelly says the slower pace of home sales is a double-edged sword for buyers.

That’s because he says the drop is mainly due to unavailability of housing stock — a trend that’s playing out in many U.S. markets. This makes matching the right buyer with the right house difficult, but not impossible.

Standing out from the competition can be tough, but there are ways for a buyer to stand out. Kelly says he has advised potential buyers to include a personal note to the sellers.

It really works, says Kelly. In April he had a listing that was shown eight times within just a few days of hitting the market. One interested buyer wrote a note and asked Kelly to pass it along to the homeowner, whose family had owned the home across multiple generations. The note included details about the buyer, his high level of interest in the property, and other details that simply can’t be conveyed via a traditional purchase offer.

“My client really took to the buyer because he obviously had so much emotional attachment to the home,” says Kelly. “That strategy helped him win the bidding war.”

In a balanced real estate market, an asking price is more or less a measure of what sellers expect to get for their properties. In a hot summer market, however, it becomes more of a negotiation starting point.

This is something that Gaspar Flores, Jr., sales director with Su Familia Real Estate in Chicago, says he has to explain to buyers who just don’t understand why an offer that’s 5 percent under asking price probably won’t get a second glance.

“Competition is fierce and sellers will take the best offer they are presented, even in situations where intense interest drives the price above listing,” Flores says.

[*LEGAL NOTE: The listing price should bear some rational relationship to what the home will sell for in the listing broker’s professional opinion. While not set in stone, it must be true and not misleading.]