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Multiple Offers And What Gets It Done

My wife loves real estate reality shows, and she will be the first to tell you that I HATE them.  Not because they are so obviously fabricated and manufactured for television consumption, but because they leave SO much out of the process.  And the illustration of bidding wars is the worst!

We watched one (as in, I was forced to watch one) where the sellers were in a bidding war.   The listing agent had multiple drinks at multiple restaurants with multiple buyer agents dealing with multiple offers and it looked SUPER easy.

It is NOT easy, folks.

Here’s the truth about multiple offers, and here are what smart real estate buyers and sellers know about the process.

 

Buyers:
Know the value of the home (through comparable sales or the cost to reproduce), but also know that you are competing for the home and (presumably) you will be living there for a while.  Think about what you are prepared to pay over the value to get the home, and be okay with that number going in.  
Very few sellers will accept offers with conditions, and that is ABSOLUTELY no reason NOT to do your due diligence going in.  Pay an inspector to go into the home before offer night, and send the MLS to your mortgage broker first.  Call the local pest exterminator and ask them if they have done any termite work on the street.  Cost out repairs.  Then make an unconditional offer with confidence.  

Get a bank draft BEFORE you make an offer, and present it with your offer.  Offers without a deposit accompanying them aren’t offers – they are proposals of offers.  If a seller accepts an offer without a deposit, that buyer could get spooked and take off – and sellers know this.  A deposit that is present reminds the seller that you are there to play ball, and if you win, you won’t get scared and take off.

Don’t be a jerk.  Every day I present offers I see agents who are jerks to the listing agent.  They come late, they come with incomplete offers and they are unreachable via phone or text during the offer process.  There is a lot of work that will happen between the agents AFTER offer night.  Listing agents want to work with agents who are professionals and who are available.  

 

There are rules, both written and unwritten.  But one thing is certain, to buy a home in this market – you have to play the game.  If you do not have a realtor, that is totally okay.  But back channeling to cut out a buyer agent, or worse yet contact the sellers directly to cut out both agents will be at best, a date with the karma truck and at worse, resulting in litigation.  

 

Sellers:
Order a pre-inspection.  If buyers see that an inspector has been through the house, you are more likely to receive offers without conditions.  But take it one step further – take the recommendations of the inspector and (within reason) FIX the issues in the house.  The ultimate sin of a seller selling anything is contempt for those who want to buy it.

Get professional pictures and staging done.  There is nothing more frustrating than the arrogance of sellers in a heated market who believe they can put a for sale sign on a piece of dog poop and it will sell for a million dollars over the asking price.  Here’s a theory for you to disregard: walk into any showroom – cars, furniture or clothes.  The ceilings are high, the lighting is directed and the smells are enticing.  These businesses take time to make you feel comfortable, at ease and ready to picture yourselves sitting in the cars, on the furniture and in the clothes.  What makes you think you SHOUDN’T do the same with your home?
 
Price it properly.  Pricing is a strategy, and a good strategy takes into account current value, market conditions, interest rate activity and buyer psychology.  Listing for $1 is just lazy.

 
Either hold offers, or do not hold offers.  Setting an offer date but also considering pre-emptive (bully) offers is stupid for everyone.  You are also doing your bank account a dis-service by contemplating an offer strategy that has as its sole purpose to save money for the buyer.

If your real estate agent (the one listing your home) brings his or her own bully offer to your home, take a minute and think – I mean REALLY think about what is happening.

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