Sometimes, the real estate market gets really hot. That was certainly the case the last two summers. If you had a listing as a real estate agent, and you priced it right, you were likely to see multiple offers within the first day. It was an all-out war, and it started to get out of hand. I was beginning to see buyers not even bother to go look at houses because they didn’t want to get into a manufactured bidding war. When buying your dream home, be prepared for some bumps in the road.
Some agents and owners loved the no show till open house. When they had a good home, and there were lots of people looking for good homes, the open house was great. I knew that it was getting ridiculous though when I was looking at a condo with one of my buyers. The agent had held an open house a month previous and the condo didn’t sell. He told me that he was having another open house during the weekend and he was sure he’d see multiple offers. That’s not how it works.
Every offer started coming in with an escalation clause. Something along the lines of you agree to pay x amount over what the last person would pay up to some number. I think agents got a little silly with this too. We would see escalation clauses with 40 and 50 thousand dollars over asking price. This didn’t make much sense because the house likely wasn’t going to appraise.
A lot of times, I told my buyers to just move on. After all, with 20 and 30 offers on a property for sale, the “winner” is going to be left holding the bag. There were times when buyers were interested in a property and we were going to make an offer. That’s where some wild things would happen.
Offer not accepted
Working with one couple, we put an offer in on a house in Mehlville. We had the highest offer but the agent and the seller chose a lower offer that didn’t make any sense. There were two reasons the listing agent gave me by email. First, the amount of down payment in our contract was lower than the other offer. Second, the other offer was in cash. Both of these excuses were silly. The amount of down payment doesn’t have anything to do with the affordability of the house. The second part of it, an all cash offer, is also misleading. Many buyers make all cash offers only to transition to a mortgage when they get a contract acceptance.
I felt really bad for my buyers. They did all the right things, and had the best offer, and still lost the house. Having the agent email me versus call was also a professional annoyance. However, an email is better than times when you don’t hear from the listing agent at all.
My buyers ended up getting a much better house in the end. It was in a better location, it had more square footage, and it was in better condition than the house they lost out on. At Deerwood Realty, I’ve seen this happen quite often. Because we aren’t forcing our buyers to act, when they find something they like, and they don’t get it, they are much more resilient. They understand when the market is hot, because we’ve told them what to expect ahead of time.
It’s OK to feel frustrated
If you have lost out on the purchase of a home, it’s OK to feel frustrated. Depending on your agent, you may feel like they are at fault. Having represented sellers with multiple offers, I can assure you that 99 percent of the time the sellers take the offer they think is going to bring them the most money. When you lose out like we did on an offer that was higher, it doesn’t feel great, but, you really don’t want to work with sellers who don’t want you to buy their house anyway. Patience can be an advantage.
As a buyer, if you are in a hot market, and the listing agent has said that there are multiple offers, it’s a horrible waste of time to write a lowball offer. There’s nothing worse than writing an offer you know ahead of time isn’t going to be accepted.
The best advice I can give on this subject is to look over comparable prices with your agent, decide what the house may need in repairs or upgrades and make the strongest offer that you are comfortable with. If you get the house, that’s great. If not, right now there are 6,000 homes for sale, there’s going to be one that suits you.