This fact has led agents and prospective home buyers to get more creative when they put in an offer, according to Zillow – a leading online marketplace for buyers, renters and sellers.
Zillow consulted its network of "Premier Agents" to create a survey that offers winning home-buying tips. The real estate tech company was compiled a list of the top tips it received from 376 of its participating agents.
When an all-cash offer can’t be put down, agents have seen success in closing deals for buyers who are willing to offer a higher down payment or earnest money. Twenty-one percent of Zillow’s Premier Agents reportedly used this strategy to help their clients, and about 25% of those who did said they extended this offer before the review date.
Another helpful method agents have seen and employed in the last year is the use of an escalation clause, which is a buyer’s way of upping their offer by a predetermined amount if a competing offer outbids them.
At least half of Zillow’s Premier Agents said they’ve seen a rise in escalation clauses along with all-cash offers, higher down or earnest payments and submissions made before the offer review date.
However, cash offers remain king in winning over home sellers in the current market. According to Zillow, 77% of agents submitted all-cash offers for their clients, and 41% of listing agents indicated this method was the "most effective strategy."
Other methods Zillow’s Premier Agents have used when making offers for clients include leaseback agreements, pizza parties and sending flowers to sellers.
Although some agents are willing to try unconventional means to sway home sellers in favor of their clients, Zillow listed "love letters" as a risky strategy that could have legal ramifications that violate the Fair Housing Act if it’s not worded correctly.
Popular home buying shows like Netflix’s "Marriage or Mortgage" may have inspired buyers to write letters to win over sellers, but Zillow says its Premier Agents believe these "love letters are the least important factor for sellers in the current market."
The median home sale price in the U.S. is $353,048, according to housing market data from Redfin – a discount real estate brokerage. This median is roughly 16.7% higher than what the market saw last year.
Moreover, the brokerage released a forecast on Tuesday that predicts American home sales will reach a record-breaking $2.53 trillion in 2021.