MULTIPLE OFFERS...WHAT DOES IT LOOK LIKE?
a case study in multiple home offers
Mr. Jones (names have been changed to protect the questionably innocent) contacted me a few months ago to talk about selling. We listed the Jones home on a Friday. I had advised him to prepare to be away from the home for showings for at least two entire days since it would, likely, be shown a great deal during that time. I had also advised him to prepare for multiple offers.
Getting the home on the market had been several months in the making. Cleaning, organizing, staging and repairs had all been completed. Professional pictures were taken and we were ready. As expected, the first showing was requested less than 10 minutes after the property went “live.” From that moment on, it was nonstop.
Each time a showing is requested, I get a text on my phone. With each text, I need to reply with a response of yes or no. I had set the showing times for a minimum of 15 minutes apart so each showing could be done without another one on top of them. The requests came in for every 15 minutes from 8 a.m. to 8:30 p.m. that evening and then we started again the next day. Two days; 39 showings; 17 offers.
One may think that this would be a slam dunk from here on out. After all, we have plenty of offers to pick from; all above ask price. We simply pick the highest offer and move forward with 16 others in backup. Well, calm your ponies, Nellie. This is not as easy as it looks.
We requested that all offers made be the final and best as my clients were not interested in countering offers back and forth for days. We
also set a deadline for all offers to be in. As the offers began to trickle in, I entered them into a spreadsheet with the relevant data: Buyer’s agent; offer price; earnest money; home warranty amount requested to be paid by seller, if any; any other requested inclusions; deadlines for earnest money; loan type; lender; and any clauses, including escalation.
Now one may ask, as my clients did, why all these factors are relevant. If one does ask that, one is very wise. Although it is up to the seller to pick the offer, they will look to their Realtor for guidance. Let us go down the list.
The buyer’s agent is important. Although the numbers are going to win nearly every time, if all things are equal, an agent that has experience can focus and see it through to the end; that would be the one that would have the better chance of winning the bid. Nobody has time for drama.
Offer price seems to be the slam dunk in the equation. However, a high offer price means nothing if the appraisal comes in lower than the offer and the buyers don’t have cash to pay the difference. This is where the other clauses or relevant information comes in. A few of these offers had included an addendum to contractually pay a certain amount over appraisal price if the appraisal came in lower than the offer.
Earnest money is the amount of money that a buyer puts down on the home as a deposit to tell the seller they are serious. The money actually has to be there within four days of offer acceptance. Here is the catch: if at any time before the due diligence or finance and appraisal deadline, the buyer changes his mind, the buyer can get his/her earnest money refunded. In this case, it is helpful, and an offer is stronger, if the earnest money, or a portion of it, can become non-refundable at contract acceptance, or at least after due diligence and before finance and appraisal.
Loan type, unfortunately, is extremely important. When an appraisal is involved,
and the offer prices are significantly higher than ask price, there is a higher chance of getting the home to appraise with a conventional loan. This makes me both sad and sick for our veterans. Veterans Administration appraisers are limited in how far they can go out to pull value.
Last, but certainly not least important: the lender. A local lender that specializes in home loans and has a good reputation and good experience is going to go a long way in a multiple offer situation. I could write a whole essay on that alone. Perhaps I will next time.
The home is currently under contract. We expect all will go well, but that is what the realtor is in place for; to be sure it does. Be like the Joneses and use a licensed realtor. It’s not as easy as it looks!
Jen Fischer is an associate broker and realtor. She can be reached at 801-645-2134 or email@example.com.
We'll Pay Cash For Your Home
COULD YOU LIVE IN YOUR CHILDHOOD HOME?
EXODUS IS BACK!
MULTIPLE OFFERS...WHAT DOES IT LOOK LIKE?
HOLIDAYS ARE A GREAT TIME FOR REAL ESTATE
IT'S RARELY WHAT WE PLAN
HIRE A LOCAL REALTOR
AGE AND FAIR HOUSING
HUFFING AND PUFFING
OUT WITH THE OLD, IN WITH THE NEW...PART 2
OUT WITH THE OLD...IN WITH THE NEW...
WHAT COUNTS AS A BEDROOM?
METH IS STILL RAMPANT...TEST FOR IT!
THE NEW F WORD IN REAL ESTATE
AND DR. SEUSS INVITED THEM IN ANYWAY...
INTEREST RATES ARE CRAZY GOOD!
LOTS AND LOTS
SHOULD I REALLY READ THE FINE PRINT?
BEWARE OF APPRAISERS FROM BIG BOX LENDERS
THE NEW NORMAL IN REAL ESTATE
PUNCTUATION & REAL ESTATE
Click here to see ALL articles.