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Old 03-14-2016, 09:18 PM
 
Location: MID ATLANTIC
8,666 posts, read 22,853,798 times
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I always have to hide a smile when someone says they want to offer below list and ask for closing in a seller's market. Then, they are heartbroken and can't believe they didn't get the home, and 9 out of 10 times, they blame the agent, even though their agent and others warned them this isn't the market to lowball sellers. I will always tell a buyer to bid like you want the home, if it really is the one you want. Don't mess around. And to take it a step further, if they take your offer at first bid, don't second guess yourself and wonder if you could have done better. Reminds me of a seller with a home priced right, getting an offer from the first person to come through. Their first thought is almost always they priced the home too low. no! The home was priced right.

About 20 years ago, an old timer (RE broker) told me more often than not, a seller's first offer received would be their best offer. Same with the buyer side, the first home a buyer likes well enough to make an offer on is usually "the house" they really want. And if they don't get the home, they measure each home against it. I dismissed this info at first, but over the years, I've found truer than not.
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Old 03-15-2016, 06:16 AM
 
6,321 posts, read 10,292,130 times
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Well I think in a sellers market overpaying would be more like paying over asking price in a market where doing that isn't very common.
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Old 03-15-2016, 07:11 AM
 
12,016 posts, read 12,695,396 times
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Quote:
Originally Posted by dblackga View Post
A property is worth what a willing and able buyer is willing to pay for it. .
Only to a certain extent. If also depends on the appraisal, if the appraisal comes in low you won't be able to get a mortgage for the higher amount, unless you are willing to pay the difference.
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Old 03-15-2016, 07:14 AM
 
12,016 posts, read 12,695,396 times
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Quote:
Originally Posted by SmartMoney View Post
About 20 years ago, an old timer (RE broker) told me more often than not, a seller's first offer received would be their best offer. .
That may be true in some cases, but the RE agent is biased and just wants to close the deal asap.
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Old 03-15-2016, 07:16 AM
Status: "Made the Retirement Run in under 12 parsecs!!!" (set 21 days ago)
 
Location: Cary, NC
43,176 posts, read 76,815,786 times
Reputation: 45533
Quote:
Originally Posted by LifeIsGood01 View Post
Only to a certain extent. If also depends on the appraisal, if the appraisal comes in low you won't be able to get a mortgage for the higher amount, unless you are willing to pay the difference.
Maybe the buyer should honor the contract they have made?
If their buyers' agent told them it was worth the contract price, and they review and agree with the CMA they used to arrive at their offer, should all of the burden of compromise fall to the sellers?
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Old 03-15-2016, 07:31 AM
 
1,767 posts, read 1,736,833 times
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About 20 years ago, an old timer (RE broker) told me more often than not, a seller's first offer received would be their best offer. Same with the buyer side, the first home a buyer likes well enough to make an offer on is usually "the house" they really want. And if they don't get the home, they measure each home against it. I dismissed this info at first, but over the years, I've found truer than not.[/quote]

I would say there is quite a bit of truth to that...I know in my own situation that the first offer I received was the best.
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Old 03-15-2016, 10:06 AM
 
Location: Needham, MA
8,539 posts, read 13,961,275 times
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Quote:
Originally Posted by oneslip View Post
I was just thinking in my own situation if I knew what the other offers were I would possibly have raised my offer to "get" the house. I do know on one house I was putting an offer on my agent put an escalatory clause in which stated that I would bid $1K over an offer up to a certain amount. If the lising agent received higher offers then they would have to supply proof of the other offer.
This is where consumers get confused . . . as the listing agent it's not my job to help the buyer get the best price for the house. It's my job to get the most money possible for the seller. The best way to do that 99 times out of 100 is the blind auction format we use here in the USA.

My question for you is . . . if you were willing to offer more to get the house and you knew you were one of multiple offers . . . why didn't you offer more?

Quote:
Originally Posted by MikeJaquish View Post
No. Neither applies. Smart buyers offer what they are willing to pay. Sometimes they are willing to pay more and improve their offers.
I always tell my clients "you've got to be able to put your head on the pillow at night and fall asleep." Don't offer so much that you'll be kicking yourself if you get it and don't offer so little that you'll be kicking yourself if you don't get it. It drives me nuts when I spend an hour talking with a client about this, we come up with an offer amount, and then they lose the property because they were holding back $10K. When I ask why they did it I often get back "we wanted to leave some room to go up." I tell my clients that - most of the time you don't get the opportunity to go up - but they don't always listen.

Quote:
Originally Posted by GoPhils View Post
Smart people also would rather not overpay even if it is something they want.
In a situation where a lot of people want the same thing, you sometimes have to pay more than you would normally want to get it. Offer what you want to but don't complain that you would have offered more when you don't get it. It's really a simple decision that most people over think.

Quote:
Originally Posted by LifeIsGood01 View Post
That may be true in some cases, but the RE agent is biased and just wants to close the deal asap.
Some may be. I view my job that I'm responsible for getting my client the most money possible for their house. I really don't care if it takes a day or 6 months. However, I've seen the old adage of "the first offer is the best offer" hold true many, many times. Buyers who are the first to move have often been in the market longest, are hungry to find a house, and are educated on what the values are because they've seen a lot of homes and missed out on them so they know what the sale price was.
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Old 03-15-2016, 01:59 PM
 
Location: Georgia
4,578 posts, read 5,643,202 times
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Quote:
Originally Posted by MikeJaquish View Post
Maybe the buyer should honor the contract they have made?
If their buyers' agent told them it was worth the contract price, and they review and agree with the CMA they used to arrive at their offer, should all of the burden of compromise fall to the sellers?
Haha, no kidding. That's why cash offers are so coveted! :-)

Appraisals have been coming up low around here for the last few months -- appraisers haven't caught up to the lack of inventory that we are facing. Scarcity = higher prices and higher demand. Econ 101. Even if we have multiple offer situations, and show the appraiser that we had four willing buyers around the list price, they still insist on using comps from six months ago, and even a year ago. We've had to go toe-to-toe with a few appraisers over this issue. Sometimes we win, sometimes we lose, sometimes there's a compromise.

But then the seller has to weigh the advantage of losing $5K to an appraisal deficiency, or losing the entire deal . . . knowing that the appraisal issue is probably going to rear its ugly head again. And some buyers just don't have the spare cash to throw at it (i.e., VA and FHA buyers). We've had compromises (split the difference, etc.) but those have usually been in cases where the buyer was anxious because they knew we had a backup offer, or the seller knew that the backup offer was for less, anyway. But almost always, the buyer will come back and scream, "THE HOUSE ISN'T WORTH IT!" and want the entire difference.
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Old 03-15-2016, 02:29 PM
 
6,321 posts, read 10,292,130 times
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Quote:
Originally Posted by MikePRU View Post
In a situation where a lot of people want the same thing, you sometimes have to pay more than you would normally want to get it. Offer what you want to but don't complain that you would have offered more when you don't get it. It's really a simple decision that most people over think.
Agree, but on the flip side it certainly does happen where people get caught up in the "bidding war" and after the fact have buyer's remorse because they probably shouldn't have paid as much as they did.

I guess I'm getting a little off topic though, I do agree with one of MikeJ's earlier posts saying that if I was a buyer I wouldn't want my offer being shopped to other buyers.
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Old 03-15-2016, 07:17 PM
 
Location: Needham, MA
8,539 posts, read 13,961,275 times
Reputation: 7921
Quote:
Originally Posted by GoPhils View Post
Agree, but on the flip side it certainly does happen where people get caught up in the "bidding war" and after the fact have buyer's remorse because they probably shouldn't have paid as much as they did.
Yup. I've seen people offer 10's of thousands of dollars more than they needed to in order to get the house. This is why . . .

1. You should hire a real estate agent who knows what they're talking about and
2. You shouldn't overthink things

It's one thing to overpay a little, but I've seen some pretty boneheaded moves. However, these people just had to have this house and they may or may not end up regretting what they did. Only time will tell.

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