It’s that time of year again! Early in the year, inventory is low – but there’s no shortage of eager buyers looking to purchase a home. While an imbalance of supply versus demand is not uncommon in the greater San Francisco Bay Area, it’s especially acute early in 2020. New inventory is trickling onto the market, and it will continue to ramp up as we get into spring. But at the moment, there’s nowhere near enough new inventory to meet demand. Sellers with well-priced homes across the region are being rewarded with multiple offers from prospective purchasers. That is of course a wonderful situation for a seller – but it’s more like a nightmare for buyers. Many of these buyers will have been looking for months, even years, before they finally put an offer in on a property…only to find out that the seller has a number of competing offers to choose from. A buyer never knows how a seller will respond in a multiple offer situation. Will they accept just one offer from the “best” buyer? Will they make counter offers to specific buyers? Will they ask all buyers to respond with their “highest and best” offer, knowing that there are multiple offers on the table? What’s more, a seller can make different counter offers to different buyers, with different prices and terms. I’m helping clients manage a few multiple-offer situations at the moment, as listing agent and as buyer’s agent. Working with buyers in a multiple offer situation is especially fraught, because of course, … Read More
Many homes in our area sell for over asking price – sometimes, a lot over asking. However, that doesn’t just happen by magic! Almost always, this is the happy result of a good old-fashioned bidding war. But how can you get multiple offers when you go to sell your own home, and ignite a hot bidding war? In a nutshell, you need a carefully crafted marketing strategy to create a strong perception of value in the minds of prospective buyers so that they will come running, cash and offers in hand. The number 1 way to create value is to set a price that will attract buyers in droves. You’ll need to couple that price with an incredible online presentation that showcases your home and really makes it stand out against all the competition in the price range. Make it look like a home that buyers will absolutely have to get in the door to see. “ Set an offer deadline to create a sense of urgency among buyers. ” You should also set an offer deadline to create a sense of urgency. If the buyer doesn’t move fast enough, they’ll miss it. Don’t review any offers before the deadline; you want to make sure that you have multiple offers in hand so that you can work the buyers against each other. Then, discover the one who loves your home more than the others; they will pay dearly for that feeling. Of course, there is a lot more to it than that. In fact, I’ve … Read More
This is an email I just wrote with some sage advice to my client. There’s a property he wants to put an offer in, but he needs to sell his current home as part of the deal (he’d make an offer contingent upon the sale of his existing home). The really tricky part is that the listing agent informed me that another offer is about to come in. This is a seller’s dream, because home owners win when buyers compete. Here’s what I wrote to my client: Client – Hi there, [Seller’s Agent] and I finished our conversation after you guys left. Here’s some more details: Other buyers are from [Nearby Expensive City]. They are paying cash. The buyer’s agent told [Seller’s Agent] “don’t get too excited.” Sounds to me like they’re not coming in so close to asking, but probably closer than the $1.xx million they’d offered verbally before. I told [Seller’s Agent] that if you do make an offer, it will be contingent upon the sale of your house. As we suspected, that isn’t really going to be an issue for these particular sellers. Does that mean you should put an offer in and see what happens? My feeling is, when buyers compete, sellers win. Since your upper limit is $1.yy, that’s something a cash buyer probably won’t have too much trouble exceeding. If [Seller’s Agent] uses an offer from you as a lever to push the other buyer up, I can easily see the buyer going over $1.yy, or higher – to whatever … Read More
You really need to look at the year before to see how the market performed – and from the statistics, we can see the median home price, county-wide, is actually down 33.5% in April of 2009 compared to a year ago. … Honestly, I am mystified how people can take a few anecdotes, completely ignore the state of the economy and the housing market as a whole, and now herald, with strident authority, that we are now at the bottom of the market and THIS, TODAY is the time to buy, or you will miss out on the chance of a lifetime. … Well, that’s not true – short sales can also occur at those prices, and some people who have had their homes a long, long time may have enough equity in them to compete with all the REOs and short sales. … Personally, I think it’s going to put increased pressure on the bottom of the market, as many people who were looking at buying a lower-priced “starter” home may now be thinking of stretching to go for one of these “premium” foreclosures which I expect we’ll be seeing.
Whether you think the current housing crisis is a cause of a symptom of the economic meltdown in the United States and abroad, there’s no denying that there’s a great deal of uncertainty about how long this recession will last , how deep it will cut , and what this means for people looking to buy a house in Santa Cruz today. I’ve said it several times in various postings to this blog, but I think it bears repeating: I think home prices in Santa Cruz county will continue to drop for the foreseeable future – and by that, I mean the rest of this year, at least. … It’s not a new thing – as I mentioned a blog entry or two ago, this multiple-offer feeding-frenzy has been going on at least 18 months, I don’t see that it is more common today than it was a year or so ago – but perhaps it’s being talked about more in the media, as there is now more effort into talking up the economy rather than talking it down. … I had seen it when it had come up (I send myself e-mails from my automated system for every bank-owned home that hits the market), but at the moment, I had a number of deadlines I was working to meet so I didn’t look at the particulars to see that it was really an incredible deal. … Actually, when it started out, I don’t think it was a short sale – but as the months went by, the price was reduced until finally the owner owed more on it than the market would pay.
Fact is, we have been seeing multiple offers for well over a year now on these bargain-basement properties in Watsonville – and pretty much anywhere in California where bank-owned foreclosures are sold several percent cheaper than competing properties – these properties attract multiple offers and sell quickly. … Pretty much – I didn’t go into 87 Arista when it was on the market, but from what I can tell on the MLS from the pictures, the choice of paint colors and level of amenities in this home was about on par with my listing. … And then, a scant two months later, my own listing comes on with an asking price of $250,000 – that’s 3.8% less than the sale price of a very very comparable property which closed just two months earlier…and I’m on the market eight days, and I’m standing in a field of chirping crickets . … But not too far below – if in fact you were able to buy a home for 10% below true market value, you could not do a thing to the property, then turn around and sell that property to someone else the next day for 10% more than you paid for it.
I guess a lot of people think it doesn’t happen very often, what with the fact that we’re in a terrible housing crisis and property values are falling down all around us, kind of like federal tax dollars raining down in Alaska . … If you are interested in putting in an offer on a house, and you find that the seller of that house has attracted several offers in a short number of days, what should your offer strategy be? … Choice C is definitely the way to go when making an offer on a house that has received multiple offers in a short period of time. The reason for this is that, if there are more than, say, 2-3 offers on the property, it is likely that it will go for over asking price .
After all was said and done, the seller’s agent and I agreed to meet for coffee and to exchange some final documents and so I could get the key to pass on to my buyers. You may not be aware of this, but Keller Williams are kind of messianic about their company. … A few months back during the Watsonville REO tour that we had, I had met another KW agent, and she spoke in glowing terms of her company, and in particular about this training that they had, which was open to agents from any brokerage, not just Keller Williams. So when I was sitting down for coffee with the seller’s agent, I started talking to her about Keller Williams and the training that they provide. … In an appreciating seller’s market, it’s not such a bad thing to over-price your property by 10% – sooner or later, the market will catch up to you, and you’ll probably end up getting that extra 10% if you wait long enough.
This is the guy who sent me an offer, and after I received it, I called him to let him know I’d be e-mailing him a “multiple offer disclosure” which I would need to have him get his client to sign and return to me by the end of the next business day, along with what his client’s “highest and best” offer might be. … Well, that’s possible , we all know that e-mail isn’t 100% reliable, but even so, you think he would have followed up with me when he didn’t receive it. … Later that afternoon, I called up all the agents who had submitted offers, and I let this agent know that a different buyer’s offer had been accepted, but thanks for putting his offer in. … It may work out such that my colleague, who is not a discount broker and who works very hard to fulfill his responsibilities to his clients, will pick up a new one as a result of this other broker’s negligence.