Bad luck or something fishy? (sale, price, offer, cost)

[bbronston]

Originally Posted by jpbumich

Nothing about "being told to put your best foot forward" is unclear, but they other buyer's best was 100$ more than our offer, and ours was supposedly submitted after. They were probably just lucky/wise enough to offer 10100 over list on a house they were told only had one offer on.

I learned a lesson, make sure you have a good Realtor/pick one in the same agency as the house you really like, or skip Realtors and buy FSBO.

I don't think you have it just yet. My guess scenario is that the first two came in. The listing agent said to your agent something like 'We have two offers and we are going to go highest and best so tell your buyer to give their highest and best offer." The LA waited for your best offer and you made what was probably an outstanding offer up to that point. You and your agent probably represented it as your highest and best offer. The listing agent, impressed with your offer which s/he understood to be the highest you were willing to go, turned to the other two and said 'we have $x on the table....go higher or forget it.' That was their opportunity to go their highest and best and one of them bested you. You can't fault the seller...they wanted the best price. I think the other agent probably should have come back to you one more time, just in case, but s/he didn't and that's that. Hopefully, you love your new house even more and will be very happy there.

[cully]

Originally Posted by jpbumich

It was just $100 dollars over. List was $190,000, we offered $200,000, and being the "last bid" we thought it would be enough. Now its 30 days after the other offer and the MLS has it updated. Which took about 30 days, I am not sure if that would be enough time for conventional financing so it was probably cash.

The sold price is $200,100. I agree with the above posters that tell us we should've offered an odd number. I don't know if they paid cash or not, that's just what our Realtor told us when we offered to counter/go higher when he told us we didn't get it. We never got to counter/offer higher (if you can even counter a "we went with another offer"). We are/were a 20% down conventional Loan.

When we made the offer we asked about escalation clauses and going up to a set amount, our Realtor told us he didn't like to do them because of the potential problems. We have since found another house, but try as hard as I can, I am still a little angry about being outbid by just $100.

Got ya. Okay. That is mysterious. I would say something fishy did go on then. Just $100 over list price is too much a red flag.

A young couple, acquaintances of mine, just recently fell in love with a house that was listed at 10% below assessment. And homes often list above assessment in that area. But we'll stick with listed 10% low. Perfect condition. Husband's parents said to offer 20% less than that...30% below assessment. Unheard of but they finally got up higher.

By that time there was another offer from a second couple not fooling around. They knew they had a little gem. They didn't offer full price but close to it.

Now, at that time the owner could have just gone with the better offer by the second couple. Or even just countered their better offer and forgotten about the young couple's offer. But the wife liked the young couple so they kept them in the running. They did divulge to that young couple that the second offer was substantially higher than theirs.

So the seller countered full price on both contracts.

Guess what, the second couple, knowing there was a chance the young couple would come up to full price, offered just about 2% above list price...but more than your $100 person.

The young couple came up to full price...and lost the house.

Figures were larger, though. In your case, it looks like something was indeed divulged that shouldn't have been.

[FalconheadWest]

Originally Posted by jpbumich

We never got a chance to raise our bid, which we would've.

Why would you think you should get a chance to raise your bid? You already knew there were multiple offers so you should have put your best foot forward in the hopes of winning and not played a game where you thought you would get a second chance. In my area, when there are multiple offers, each buyer's agent is told and that's the chance where the buyers get to put their best foot forward. You did that, and lost. It's not "fishy", you just lost.

[cully]

Originally Posted by Northern Maine Land Man

Different states use different terms. I have not seen the term "escalation" before. In Maine they call it a kickout clause.

Your kickout clause is probably the same as other states I'm familiar with. Say a homeowner accepts a contingent contract to purchase. Since the contract is contingent on more than usual due diligence stuff...say, contingent on a home sale that could take longer...the seller is interested in taking a better offer.

When that other offer is finalized as acceptable, the kickout period goes into effect. Whatever was originally agreed to...24 hours, 36 hours, 72. Buyer No. 1 either removes the clause with good proof it will work out without the contingency or Buyer No.1 bows out and the back up contract moves into first place.

The escalation clause is a buyer having let the realtor know that if there is an issue, say multiple contracts, rather than have the realtor even wait to get in touch with that buyer, the buyer already signs with the realtor that he will let the realtor negotiate for him up to a certain price.

[jpbumich]

Originally Posted by FalconheadWest

Why would you think you should get a chance to raise your bid? You already knew there were multiple offers so you should have put your best foot forward in the hopes of winning and not played a game where you thought you would get a second chance.

I don't think you understand, I'm not bitter about having "played a game and lost", just that unless there was an escalation clause, someone did get to raise their bid on their best offer. But we weren't offered the same opportunity. If no one had been given a second chance I wouldn't have a complaint, but it certainly looks like someone else did.

[1insider]

Rather than speculate about wrongdoing, accept that the other offer may have been cash or a coincidence that they offered just a little more than $10,000 above asking, not a crazy strategy to offer slightly above round numbers in a multiple offer scenario. [Note to others who may find themselves in a similar situation.]

[mic111]

All sort of crazy things happen in real estate transactions. Most of us only buy a couple of houses in our lifetimes and therefore it is hard to have any experience built up in the area of home buying. If the comps supported at $200K price on the house you were looking at then it is very easy to believe that two bids came in at practically the same amount. I use the following example of a real life situation.

Our relatives were selling a house in Denver in 2012. Denver had been in a slump (2010 or 2011) so they did a lease to own to a nice couple at $240K with the purchase in 2012. When it came time to buy the couple either couldn't buy it or changed their mind.

They contacted several real estate people to handle the sale. It was practically original 1960s condition and needed much updating. The realtors (at least 3 or 4 of them) said they weren't interested. They were discouraged. The guy who took it on had sold them a condo and they liked his marketing. In fact the time we went over to see it he was on a ladder taking down their non-1960s light fixture. I asked him why and he said the market would like it better if everything were vintage. I shrugged my shoulders as now there was a hole in the ceiling with wires dangling out but he said it would photograph better without the 1990s chandelier.

He did a market analysis that said they should list it for $270K. They feared it would not sell at that as the other couple walked away at $240K. They asked that it be listed at $250K for a fast sale. The savvy agent listed it on a Thurs. night. Within 2 days (Sat. evening) he had 7 offers at $270K. All exactly $270K, some with love letters. There was no second round. He asked everyone to bring their best and final. Was he fishy? Did he reveal the first bid? No. All he did was send a copy of his market analysis to all the interested parties. Not one person bid $1 over or $1 under $270K. Now to me that was weird.

The owners, who had lived in the 1960s home since it was built, picked a young couple with kids and a love letter. However, they backed out. Then they picked a different buyer. That went through without a hitch. The lucky buyer scored a ton of original mid century modern furniture that didn't fit into their condo.

I just looked up the value on zillow and it is now $379K as Denver has zoomed up in value. Who knows why the rent to own folks who could have had a bargain or the other young couple backed out. My guess is the rent to own couple, having lived there for a year or so, found the house too much work. It was on a 3/4 acre lot and needed a ton of interior work. My guess for the young couple with kids is that they were too nervous to execute, thinking they had over paid since they did not know about the 6 other offers. The savvy out of state buyer (I don't think he saw the place before buying it), swooped in and got a great deal. I seem to remember there being a question of it appraising but the savvy agent showed the bank the 7 offers at $270K and the comps which they agreed meant the value was at least $270K.
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Moral of the story is that if your agent did the comps and came up with $200K being a supported value for the house it is not the lease bit suspicious that other agents ran the numbers and came up with the same number. Remember, the buyer's bank has to agree to fund a house at a certain value so buyers who need financing can't just go hog wild with the value. The fact that it was just $100 over sounds like either the other agent was savvy with multiple offer situations or the other buyer was. A bank probably won't blink at $100 over the assessed value but it gives the buyer the edge in the offer scenario. However if the buyer had iffy financing the seller would never have risked the deal for $100. Also I doubt any agent would risk their license and do something fishy for the commission on $100 (3.2% of $100 is $3.20). Can you even buy coffee with that?

[jpbumich]

Originally Posted by mic111

Also I doubt any agent would risk their license and do something fishy for the commission on $100 (3.2% of $100 is $3.20). Can you even buy coffee with that?

Oh ok, I guess I thought if the agent sells a listing from his/her own agency, they get a better split on the commission. (like going from 80% of the commission to the agent and 20 to the brokerage to 90/10 with 90% to the broker, I am sure that varies from region and office to office) Not that that is a lot of money either, 600$ or so if going from 80-90%. I was told that by a relative who was a Realtor, she said it was incentive to make deals within the agency, but I wasn't sure.

[Silverfall]

Originally Posted by jpbumich

I don't think you understand, I'm not bitter about having "played a game and lost", just that unless there was an escalation clause, someone did get to raise their bid on their best offer. But we weren't offered the same opportunity. If no one had been given a second chance I wouldn't have a complaint, but it certainly looks like someone else did.

Here is how things likely happened.

• First offer came in.
• Listing agents lets all agents know, that showed the property to date, that an offer came in.
• Second offer is aware that there is another offer and is told highest and best.
• Second offer comes in at highest and best already.
• Listing agent calls first buyer agent to let them know of multiple offers and to give highest and best since the first buyer would be unaware of the multiple offer situation and the second buyer was made aware.
• First offer submits highest and best.
• Your agent is aware of two offers and is told highest and best.
• You submit an offer not understanding that it is supposed to be your highest and best. You had the opportunity to submit at that moment in time with an escalation clause, but that wasn't made clear to you.

There is nothing fishy here. I'm not sure how it went from there are two other offers to you not being made aware that the offer you were making was your best offer, but that is between you and your buyer agent. The finality of that offer wasn't clear to you.

[jpbumich]

Originally Posted by Silverfall

Here is how things likely happened.

• First offer came in.
• Listing agents lets all agents know, that showed the property to date, that an offer came in.
• Second offer is aware that there is another offer and is told highest and best.
• Second offer comes in at highest and best already.
• Listing agent calls first buyer agent to let them know of multiple offers and to give highest and best since the first buyer would be unaware of the multiple offer situation and the second buyer was made aware.
• First offer submits highest and best.
• Your agent is aware of two offers and is told highest and best.
• You submit an offer not understanding that it is supposed to be your highest and best. You had the opportunity to submit at that moment in time with an escalation clause, but that wasn't made clear to you.

There is nothing fishy here. I'm not sure how it went from there are two other offers to you not being made aware that the offer you were making was your best offer, but that is between you and your buyer agent. The finality of that offer wasn't clear to you.

That's exactly what I thought the order was, and hoped it actually was. it's just being beat by 100$ on a an offer already 10k over list with few comps to back it up to a buyers agent who works with the selling agent that gives me pause. We were explained and understand best offer, but if you told anyone who loved a house they could get it for 100-200$ more then their "best and highest " offer, I am willing to bet they would do it. -what I am trying to say is that, from where I sit, it looks like he used our offer, showed it to another agent and like one of the Realtors above said "we have an offer for X$, beat it"

And before someone asks, yes we are aware that if the offer was higher then appraised value we'd pay the difference, which we were willing to do and made clear.