Purchasing a home? First time home buyer? Beat out by another offer? Caught in a bidding war? Is a seller really mulling over your offer for hours on end?

Have you ever put an offer on a home only to be beat out by another offer in the final hour?

Have you ever put an offer on a home only to be caught in a bidding war?

What is up with multiple offers arriving after you put your offer in anyways?

Things you may want to know…..

After your offer is presented, it is not unusual for the seller’s agent to call up all the other agents who brought potential buyers through to view the home in the last week or so and to tell them the property has an offer on it.  As a result of the seller’s agent calling everyone else up, more offers can materialize.  Great news for the seller, not so great news for the buyer.

What you can do….

Try not to leave your offer open for way too long of time period, have it close the same day and within a few hours.  You may think you are being courteous by giving the sellers more time to consider your offer, but you may end up giving the seller the advantage by giving their agent too much time to generate more offers for them.

The worst thing you can do…

If you are viewing a home with your agent and the seller’s agent is there, the worst thing you can do is to get overly excited and/or say we should put an offer on this place tomorrow, Friday, etc.

Remember…

Poker face, no matter how much you like the home.

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18 Comments (+add yours?)

  1. coconews
    May 06, 2008 @ 15:53:51

    Did you know about this? Very few realtors will tell you about it.

    What do you think about this? Does it put the buyer at a disadvantage?

  2. Larry Yatkowsky
    May 06, 2008 @ 16:34:09

    Coco,
    For purpose of clarity do remember who the selling agent is working for. I suggest that anyone who is selling would consider this to be a Realtor task you would insist on.

    In regards to “what can you do?” In a multiple offer scenario it is a requirement that all parties making an offer are to be kept advised of all offers being declared. The only fluid aspect of this declaration is from the standpoint that it can happen up to and including the time of presentation. There really is no cut off point unless the seller agrees to it.

    Re: Timing.
    The seller not the buyer, has control of when and where presentations will occur. That the Buyer chooses to “rush” their offer most likely will be countered with something like “no we will consider it after the open house.” Again little control for the Buyer. From the Seller’s perspective they are looking to expose and give opportunity to the greatest number of potential Buyers. Therefore, rushing your offer will hold little significance.
    I do concur with the last paragraph. Rule of thumb, “ask don’t tell!”
    Thanks for letting me clarify.

  3. Strataman
    May 06, 2008 @ 18:42:39

    Hi Coco! Glad you’re back! 🙂 Yes I knew about that for a long time. When I make an offer on a home it is never my “final offer” I always offer a little under (usually 20K). If the realitor selling the place is astute then they will know that. I will wait for a number of days until they come back to me and say they have a better offer! Obviously I will be informed of the offer, then I decide if that offer is above/below my personal threshold. I will counter offer IF I think it still works for me. If not I drop it. I had assumed everybody did that, maybe I am mistaken but it is to my mind a very typical sales gimmick. Comments?

  4. M-
    May 06, 2008 @ 19:52:44

    Yep, I used almost that technique to my advantage when I sold my place– when we were reasonably confident that we had an offer coming in, my realtor called up all the other realtors who’d expressed an interest in my place.

    We ended up with three offers. One slightly over asking, one a little higher, and one a little higher still, but with subjects. We managed to get the middle-offerer to bump up their no-subjects bid to the same value as the top offer. More money for us and less risk, though I’m sure the two losing bidders didn’t appreciate it, even if they understood it.

    Similarly, 3 years earlier when we bought our place, the listing realtor made a strategic blunder– she let our realtor know about this listing before it came on the market, and on the day of the open house, let us know that the owners needed to sell really fast and they’d consider a same-day offer. We’d already done our research on the building, and were able to put in a same-day offer at less-than-asking (late in the day), and they accepted it. A couple days later, the listing realtor got a written offer for $20K over asking. Factors that helped us: we were our realtor’s first clients, and the selling realtor was from the same office. The listing realtor had incentive to sell it to her office’s newbie realtor with a sweetheart deal. Good for us, bad for her clients.

  5. GM
    May 06, 2008 @ 22:37:29

    I’ve read a lot about real estate, and I didn’t know this. Can’t say I’m surprised. I’m sure it helps the selling agent’s commission. I’ll keep this in mind when we go to buy.

  6. coconews
    May 06, 2008 @ 23:25:34

    Okay, I fixed the problems with the comments being held up for approval. You should be able to post normally now.

  7. coconews
    May 06, 2008 @ 23:37:12

    Larry, I do know who the selling agent is working for, but the post is for buyers who want to know what goes on behind the scenes with their offer with the sellers agent.

    You mentioned a rushed offer may get turned down, but I actually didn’t mention anything about “rushing” an offer, just not giving the seller too much time to respond back. Some people give the seller 24 hours or more to respond to an offer. Which you have to admit, gives the seller’s realtor a lot of time to drum up additional offers.

    Sure, ultimately the seller has control of when they will accept offers, etc., but you can’t blame a buyer for trying.

    If you would like to elaborate further how many hours you think a rushed offer is, be my guest.

  8. View
    May 07, 2008 @ 06:45:40

    I sold in November 2007 and my agent did something like this. I had a low-ball offer and the realtor got another couple to make an offer based on that fact.

    I was not looking to buy, but my agent and I went to an open house and then had a martini after and the open house agent called several times to say there were people “thinking” of making an offer! There was pressure to put in an offer for sure.

  9. paulb
    May 07, 2008 @ 09:19:57

    Often when I present and offer I will only have it open for an hour or two. When it’s a hot listing it is essential to act quickly. If a listing agent is playing games it may be best to find something else. Unfortunately that’s easier said than done.

  10. Bill
    May 07, 2008 @ 09:34:17

    Gotta love it, different viewpoints from different realtors.

  11. coconews
    May 07, 2008 @ 09:48:38

    Any more realtors wish to chime in?

    The more the merrier.

    Why don’t buyers realtors tell them that the seller may be trying to drum up other offers automatically, if you leave your offer open for too long? Is it just because your commission goes up as the price goes up? Is that why nothing is ever mentioned about this to a buyer?

  12. paulb
    May 07, 2008 @ 10:40:45

    A listing realtor may use an offer that is slow to negotiate as leverage to seduce a sidelined buyer into submitting a very strong offer. This is intended to get the vendor top dollar and fewer subjects.

    The amount the agent’s commission moves up or down with price is very small.

  13. coconews
    May 07, 2008 @ 11:13:33

    Paul,

    Thank you very much for enlightening all of us on this subject, this information will help people understand how the offer process works from both sides.

    Perhaps, the majority of people only think about the buyers side, if they are a buyer and only think about the sellers side, if they are a seller?

    Once you look how the transaction works from both sides, you actually can see the “big picture” much better.

  14. Vansanity
    May 07, 2008 @ 14:15:21

    Hey Coco – OT – Where is that pic from? It totally reminds me of the photos we have from our native Azores islands. Would be trippy if it was!

    Glad to see you’re back.

    Sales people are shady, always have to be careful with them.

  15. coconews
    May 07, 2008 @ 17:01:14

    Hi, Vansanity

    Nice to see you here too.

    I will agree with you on some sales people being shady, but certainly they are all not like that. The big question to ask yourself is whether a sales person is looking after your best interests or just looking after their own interests first.

    I also heard of some realtors that show you three to five properties maximum and then say pick one. I have never run into someone who does that though, so I’m not sure if that is fact, fiction or just a juicy rumor.

    I’m not sure where the island pic is from; I didn’t have time to download one of my own photos yet and this one automatically came with the blog. It’s not too shabby, although I personally prefer pictures that are not hazy. I guess you can call me Coco crisp. lol. That is really lame, eh?

  16. kicker
    May 07, 2008 @ 20:46:45

    Interesting post of the manipulative tactics used in real estate.

    In response to Larry’s post I suspect the time frame contained in the offer depends on how desperate the seller is to unload the property. In the up market of the last few years he might have a point. However, the times are changing.

  17. Larry Yatkowsky
    May 08, 2008 @ 00:19:11

    Kicker,

    I suggest that “manipulative” is OTT.

    Think more of it as “positioning” your client’s offer in the best possible manner to achieve the success they hope for.

    I’m certain you will agree, that is the responsibility we are charged with on behalf of the client?

    It’s a small town. Our reputation for reasoned fairness and ethic in our dealings with other agents precedes us. I assure you that is serves well the goal of achieving success for the client far more than any form of manipulation.

  18. Larry Yatkowsky
    May 08, 2008 @ 00:38:49

    Bill,

    re: viewpoints

    Circumstance determines position taken. While the process has similarities the nuance of the moment creates a need for dissimilar responses.

    GM.

    commission

    yah gotta do the math before you make those statements. As PaulB said, when the chips hit the ground it’s small pieces and leave little incentive to be picked up.

    Perhaps I’m being insensitive. Is the goal to stop and pick up pennies from the street or is the objective to try your very best to help your client buy or sell a home at a fair price relative to the market of the day. Far more the worthy a challenge IMO.

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