More on Multiple Offers. An integral part of our marketplace at the moment. A strange landscape that buyers and their agents are struggling to find better and more effective ways to navigate over, under, around and through.
There are no accurate maps. Just vague compass points. An occasional star in the nighttime sky to triangulate from. Lots of fateful winds and rogue waves that can rise up to ruin your day at a moment’s notice.
Some hopefully soon-to-be Buyers reading this have already been through three or four multiple offer situations without taking home a home as their trophy. Instead they’ve taken a roller coaster ride through the ringer. Felt the highs and the lows of being in the hunt. Gotten close but not close enough. No banana as of yet.
Other would-be Buyers reading this are just beginning to venture into the market. Stick their toes into the deep end. They’ve heard it can be tough to buy right now but they haven’t experienced what it feels like in their guts or in their bones when they find themselves sweating out the conclusion of a life-changing process accompanied by a sensation of complete powerlessness.
Any Agent who has done more than a couple of deals in the last six months has undoubtedly mixed it up with a multiple offer scenario or two along the way. A lot of what is accepted as status quo procedure in a multiple offer land came out of the huge run up of the late 1990’s. When Silicon Valley was going nuts. Manna in the form of IPOs was falling out of the sky. Hordes of 30somethings were wondering through open houses with stock options burning holes in their pockets.
I remember counting multiple offer transactions. I had a streak of 150 closed escrows that involved 145 multiple offer situations of one kind of another. In some I represented Sellers receiving 5 to 15 offers on their properties. In others I represented Buyers competing against anywhere from 3 to 30 offers on the latest greatest listing to hit the streets.
What was it that Jim McKay used to say at the beginning of every edition of ABCs Wide World Of Sports? “The thrill of victory or the agony of defeat. The human drama of real estate competition… “
Win or lose, joyous celebration or crushing crash and burn, most real estate deals are accompanied by huge-doses of that mind-altering chemical stimulants known as adrenalin. Regular real estate is like Wide World of Sports. Here on the multiple offer channel, real estate’s altered state of mind is like the Wild World of Xtreme Sports ramped-up on roids.
As much as it is possible to generalize about anything in real estate – let’s outline the typical M.O./M.O – Multiple Offer Modus Operandi – that you are likely to find in the market these days.
Pretend I’m the listing Agent on a great new property worth somewhere in the $600s – $700s.
Here’s probably how I’m going to run it – or at least suggest to my Seller-Client that they run it:
Listing goes on the MLS on Tuesday. Brokers Open on Thursday. Open house on Saturday and Sunday. Both days 1-4pm. If it is clear that there is significant offer-writing interest on the property by the end of the first weekend, then we set a date and time that’s not too far out in the distance. Let’s say Wednesday at 12noon. All offers to be in by then. No exceptions. No foot dragging.
If it is clear by the end of the open house on Sunday that there is interest, but not INTEREST, then the likelihood is that there will be another Brokers Open the next Thursday and another round of open houses the next Saturday and Sunday.
If we haven’t gotten enough of the right people through by the second Sunday to capitalize the word INTEREST…then, the conclusion is clear – we are priced on the high side of where we should be. And before we lose all the mojo that comes with being a new listing – we better lower the price and find the place that the market is willing to compete at.
If we get to a third week or fourth week with a listing in the $500k – $800k price range – then the accrued days on market are going to kill us. We’re going to sell for less than if we had priced it lower in the first place and let the competition between buyers carry the price up.