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I sold my house in CA in 94, and we had multiple offers. Here's our story.
Decided on the Realtor to list my house. He said that he had just come back from a seminar and wanted to try something new (for him).
We already had a good idea of what our house should sell for. He wanted to list it a few thousand dollars below that level. His idea, was that such a low price would bring multiple offers, and would raise the price up to where it should be.
The second day it was listed we had three people interested. We told them to submit their best offer in two days and we would decide to accept one of them then.
What was interesting is that all the offers came in a little above the dollar amount we thought the house would sell for. We actually picked the middle offer because they were pre-approved, and had no contingency. Since we were moving to TN, we wanted to have a quick and easy sale.
I only had one stipulation, that they use an ASHI or CRIEA home inspector, and suggested they find one that did not know me.
We corrected all of the things they wanted from the inspection, and bought them a warranty. I even agreed to the picky-a$$ stuff they wanted.
Being told there are multiple offers when there really isn't is a tactic(not what I care for nor condone) that some sellers/listing agents use. I have been involved with three such scenarios in the past ten weeks when I was representing the buyer. The key is to educate the buyer ahead of time about this possibility and for the buyer not to get emotionally involved with a house they don't even own yet. In each of the three instances where my buyers were told of multiple offers, they were asked to resubmit their offer with their highest and best offer. Two of my buyers did not resubmit a higher offer. We told the listing agent that our original offer would not be changed and that if they were outbid then so be it. Both of these offers were accepted within 24 hours. With my third client, we told the listing agent that we were not interested in getting in to a bidding war and we withdrew our original offer. Two days later we got a call from the listing agent asking us to resubmit our original offer as the "other two offers" fell through. We did resubmit, but at a price 25k less than our original offer. My clients ended up getting the house for 15k less than their original offer.
In all three scenarios my clients were willing to play hardball, knowing that there might really be legitimate multiple offers. However, they were not emotionally attached to the house before they bought it and they knew that there were many other options out there. My bottom line with my clients isto suggest they offer what they believe is fair market value for the house based on real comps, without taking into consideration whether or not there are multiple offers.
There's some great info here. I would trust a listing agent as far as I could throw them. I advise my buyers not to get emotionally attached to the home and just offer what they think is fair for the home based upon closed comps and what they think the home is worth. If they lose out, there will be another home that will be on the market to bid on.
Has anybody run up against this issue. Agency A lists a home for $39K. Agnecy B (me) submits cash offer for $52K. I loose bid to lower Agancy A $46K cash offer. How do I verify that this was not interagency collusion, fraud and rackateering? Paul B - Phoenix Arizona
Sure have here in Orange County. There was an REO in Irvine. My buyer offered $740k (there were 20 offers because the property was priced below comps at $649k). The bank accepted the 6th highest offer of $700k...a full cash offer. That being said, my buyers were putting down $400k. My buyers were PISSED as was I.
i bought two last year. Told then that
I don't bid against myself, and a resubmitted offer would be a lower offer. They were asking 45K, I got it for 35,400 and another was listed for 62K, and purchased for 22K.
I sold my house in CA in 94, and we had multiple offers. Here's our story.
Decided on the Realtor to list my house. He said that he had just come back from a seminar and wanted to try something new (for him).
We already had a good idea of what our house should sell for. He wanted to list it a few thousand dollars below that level. His idea, was that such a low price would bring multiple offers, and would raise the price up to where it should be.
The second day it was listed we had three people interested. We told them to submit their best offer in two days and we would decide to accept one of them then.
What was interesting is that all the offers came in a little above the dollar amount we thought the house would sell for. We actually picked the middle offer because they were pre-approved, and had no contingency. Since we were moving to TN, we wanted to have a quick and easy sale.
I only had one stipulation, that they use an ASHI or CRIEA home inspector, and suggested they find one that did not know me.
We corrected all of the things they wanted from the inspection, and bought them a warranty. I even agreed to the picky-a$$ stuff they wanted.
Nothing new with that strategy. I always use that on my listings. It brings out multiple offers quickly and then buyers will tend to get emotional (kinda like an Ebay auction) and bid up the price more than it should have been. Another good listing strategy is doing a range price where the middle is your desired sales price. There are a lot of ways to skin a cat.
I know a broker that I'm pretty sure uses that tactic. If she has a potential buyer, before they can even make it to the bank she's calling them with the emergency of someone else wants to buy the property so they better hurry or offer more $$. I only know this because they'll come to my office upset and tell me about it and my answer is I sure find it odd that piece has been on the market for a long time and now all the sudden everyone wants it, plus it's not unusal for her potential buyers to end up in my office telling me the same story. I usually have a better deal for them anyway and they buy one of my listings. As long as she keeps using that tactic it works out in my favor.
While I am sure there are dishonest agents out there just like so many people are not truthful, I have not ever directly caught this happening from another agent. However, in order to be able to make an educated guess on if this is really happening or not, it depends on the city, area/neighborhood and how hot it is, and most of all, how hot the individual property is. In our most sought-after areas, a good home that is staged well, clean, without apparent issues, has a good floorplan, low or at least fair asking price, will have a bidding war and can drive the price up. Whenever I tell a buyer client who doesn't know me for very long (like a long time friend or family member) who may not trust me 100%, I can feel their distrust in my statements concerning them needing to place a higher offer than they think is proper in order to have a shot. Many times I see buyers lose out on a property (especially HUD and foreclosed homes that are in good shape) because only the best and highest bid wins the chance to further negotiate. While some may not believe this, I actually had the following situation happen once: A buyer wanted a foreclosure BADLY that was in a top neighborhood. It was all brick, with a large privacy-fenced backyard, awesome floorplan, in good shape with 4 bedrooms that was priced lower than I had ever seen a property priced before compared to its' comps (usually our HUD and foreclosure asking prices are not that much less than market value here, and they actually go for full asking price many times, even if market price). The buyer asked me (I was the buyers' agent) what he should offer. I pulled the most recent situations on asking to sold price ratios for that particular bank in our area on foreclosures. I told him it will probably go for way more than asking price and if he really wants it, to place as high as he will go. It was priced so low, that it was about 20k below market (virtually unheard of in this $200-$250k range neighborhood). Please note that if it were 20k below market in a $400k priced neighborhood, that ratio would be different and more common. There had been 6 showings that day already (and at least that many each day prior), and the deadline for all offers was to be in a couple of hours. They had several bids in already. So, he placed an offer at his choice for $14k OVER asking price. He got a rejection and it sold for $16k over asking price. This buyer actually called my broker behind my back, thinking I was being dishonest and trying to drive the price up for whatever reason (that difference doesn't affect my commission by that much after my splits, taxes, etc., so it didn't matter much at all anyway). My broker got the other agent on the phone with him on a three way. The agent confirmed this was true and that he did not place a high enough offer. This is the most extreme situation of this kind I have ever seen, but really the home still sold for less than market value! In Florida, N.J., Michigan, or California, I am sure this may be unheard of. This happened a couple of years ago, when our market was a little more of a sellers' market also. I see HUD homes and foreclosures go for full price still though (if of course they are fairly priced to begin with). Our homes in the under $250k range (which is close to the average price that sells here) are selling for anywhere within 96% and 100% of asking price right now. Before placing an offer for a buyer, I always pull these numbers and all factors to help them decide on a negotiation strategy as just one factor of the game. A really good, knowledgeable, thorough, detail-oriented, experienced realtor that has represented buyers should work diligently to help prepare a strategy before placing any offers. I never have my buyer place an offer until I spend hours on this first, unless it is a hot home, and I usually know this before showing it. When this is the case, I will pull information before we view it, bring the blank offer paperwork with me, and am already prepared to get started in case someone else is ready to place an offer in competition with us. I can usually tell if a home will be hot or not with enough prep after my buyer tells me their list of homes they narrow down to view from what I send them online. Just the other day I placed an offer right there in the home. We got it wrapped up within a day and we are closing next month. Just remember, it all depends on several factors in if a bidding war is expected or not (at least within a 60 mile radius of Nashville in this market). Other cities may be different. In general, I find that people are more honest around middle TN. It is so honest that my out of state buyers are in shock and almost think people have an ultimatum, when they are just being how they normally are!
There's some great info here. I would trust a listing agent as far as I could throw them. I advise my buyers not to get emotionally attached to the home and just offer what they think is fair for the home based upon closed comps and what they think the home is worth. If they lose out, there will be another home that will be on the market to bid on.
tried to rep you but you know the rules...
things are much harder once you fall in love...'cos in love, all caution goes in the wind...and you get all irrational and can't think straight 'cos your heart is beating so fast and you get butterflies in your stomach
i found a house that i really like....i had to keep reminding myself to stay emotionally detached (as hard as it might be).
anyway....was planning to make an offer when i was told by the seller's agent that the house is under some kind of contract at the full price. i was like..."oh really?!".
then 1/2 day later....seller's agent said there appears to be some issues with the closing 'cos their buyer had some problems selling their house and requested an extension. so he asked us to put in our offer anyway. we liked it enough to put in an offer although i thought it was kinda fishy...but no where near the asking price of course but it was a full cash offer.
after receiving our offer....seller's agent called back within minutes to say that "oh i should've told you this earlier (yeah, then WHY DIDN"T YOU??!!)...the sellers won't respond to any offer below $xxx, xxx and they've still got the FULL PRICE offer on the table (which the agent told us was problematic??)".
i feel like there's something going on there...but i just said sorry i won't go above $xxxx,xxx eventhough we are sincere and really like the house. i know that the sellers have to sell their house 'cos they've just bought another house. i'm not trying to take advantage of their situation but i think my asking is fair and i'm willing to be flexible with the closing date 'cos i know the sellers new house is still under construction.
i'm in no rush...but they are in a rush....i can always find another place even though i really really like their house...but not enough to give them the upperhand in the price setting process. we'll see how it goes....
In Indiana we have the multiple offer disclosure form, so if someone doesn't think there is a actual second offer they could ask for that to be signed. All parties must sign. It doesn't tell you what the other offer is, but you know there actually is another paper offer. Other states must have something like that.
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tried to rep you but you know the rules...
