When her clients find themselves caught up in a heated bidding war, Jamaica Plain real estate broker Ellen Grubert suggests they put pen to paper — not necessarily to up the offer, but to ingratiate themselves to the seller of the property.
Write a letter that flatters the seller’s taste and appeals to their emotional attachment to the house. If the grounds are nicely landscaped, mention how much you like to garden; if the house holds family memories, talk about raising your children there, too.
“You want to appeal to the seller, that you will take care of the house,’’ said Grubert, vice president of residential sales at Coldwell Banker Residential Brokerage in Jamaica Plain. “Especially if the seller loves their home, it pulls on their heart strings.”
With bidding wars for choice homes in the Boston market as common as crocuses in spring, buyers and their agents are resorting to unusual tactics to stand out in the crowd. Fueled by a perfect storm of market forces — very low interest rates, an improving economy, and limited supply of homes — eager buyers are bidding up home values in metro Boston and leaving an increasingly larger pool of frustrated shoppers on the losing end.
In February the median price for a single-family home in the region jumped nearly 9 percent, to $429,900, from the same period last year, according to the Greater Boston Association of Realtors. Homes are selling more quickly, too. The average listing period fell to 109 days in February, down from 134 in February 2012, according to the association.
And in coveted areas of downtown Boston, Cambridge, and Somerville, the better properties can sell over a weekend, real estate agents say.
To help buyers survive this anxiety-drenched process, real estate agents are prepping clients to be ready to act quickly when they find a property they like, and to be prepared to offer incentives unseen since the housing heyday of 2004 and 2005.
Those include: waiving the home inspection, or being willing to pay a penalty if the deal falls through. Buyers are also being more flexible with sellers in terms of when a closing occurs or if a seller can rent back a home for some time, agents say.
“As home buyers compete they are going to try to put themselves in a position of strengthening the offer, price, and terms,’’ said Mike DelRose of RE/MAX Leading Edge in Watertown.
But agents also warn buyers not to offer more than they can afford or give up legal rights that they will later regret. Some potential home buyers have already lost their deposits or are finding the home they just bought unexpectedly needs expensive repairs, said Gary Dwyer, owner of Buyer Agents of Boston.
“Sometimes no property is better than a bad property or losing all your deposit,” he said. “There is a lot of buyers’ remorse that is starting to percolate out there.”
To avoid mistakes, Grubert cautions buyers not to provide information that could hurt — rather than help — their chances.
For example, Grubert said one of her sellers recently received a letter from a buyer saying they would use the house only part time. A competing buyer wrote about wanting to bring up a family in the home — and won.
“They discussed too much,’’ she said about the losing bid.
DelRose said sellers will sift through offers to consider strengths and weaknesses of potential buyers — the size of the down payment, their overall financial well-being. Sellers may even vet the lender a bidder has for preapproval, with stable local and national banks viewed more favorably, he said.
Despite the competition, DelRose said buyers should not get desperate — he believes more sellers will appear as the spring heats up. “They don’t have to be so pressured to make a move,” he said.
The current bidding wars are reminiscent of the last housing heyday in 2004 and 2005, said Lawrence Yun, chief economist for the National Association of Realtors. The excitement — irrational exuberance to some — was aided by easy lending terms and led to an overheated market that burst in the second half of the last decade.
Yun says this new energy — visible in many areas around the country — is different because buyers are purchasing homes with cash or financing mortgages with lenders with much more rigid eligibility requirements. “Today’s market is fundamentally different,’’ he said. “Access to mortgage credit is exceptionally tight.”
As the market improves, sellers too are finding different ways of fielding offers. Chris Tuite, managing partner of Gibson Sotheby’s International Realty in Boston, said his office has started to set a deadline — usually a week — for offers on popular condominiums. That should be enough time buyers to adequately vet a property but also adds pressure to the process, he said. He said agents try to help sellers set the highest realistic price for a home, but emotional buyers can drive prices higher.
“Every seller wants to have a bidding war,” he said. “It is a good opportunity for the market to set itself.”