Multiple Offers 2.0
Forgive me Huffington Post for I have sinned. It’s been a really long time since my last confession. It’s an indication of just how busy things have been in DC, in Real Estate, and in life.
Nothing has equalized yet, party people. The insanity presented to buyers in the Spring 2017 DC Real Estate Market has continued right into summer, unabated.
It is time to revisit the Multiple Offer, 2.0. This topic is going to be split into a couple parts. We’ll spend the first installment revisiting the lay of the land and getting up to speed on where we are now and how we got here.
Prior to this year, the approach and handling of multiple offers by both buyers and sellers seemed to follow the same essential process: Property listed for sale on Thursday or Friday with the offer deadline in the listing notes. There was the obligatory Sunday open house and offers were due on Tuesday or Wednesday. Wash. Rinse. Repeat. This seemed to work well for the past several years. Everyone had the same information, knew what to do and by when they needed to do it.
Last Fall (2016) there was a definite slowdown in the market. It was a bit surprising, but in a city with all eyes on the Election and subsequent craziness, the collective yawn was the best we could do. Properties on the market sometimes still included notes stating that offers were due on a certain date, which was well into the past. It was hard to know if a 41-day negotiation standoff was in process or if the property was still fully available. I always call the agent when I see things like this because I’m nice like that and if you have a snot hanging out your nose I’m going to tell you. (I just lied. I don’t always call. Sometimes I don’t have time or the energy to help other people do their job too.) Funny enough, each time I made this call, I received the same answer from all these different agents, every single time:
“Oh, my assistant must have forgotten to change that.”
That poor, potentially non-existent assistant. To be fair, last fall, many of us were off our game. The cooling off came swiftly and no one really expected it.
Of course, no one expected either that when spring arrived, the bulls would charge out of the gate. Despite the strength of the market in 2017, there are a lot of listing agents who are still hesitant to commit to an offer deadline the day the property is listed. See: Still feeling the chill of last fall.
Despite the market strength right now, this hesitancy to decide an offer deadline on listing day is because some properties out there are defying the odds - and not in a good way. There are properties listed right now that everyone cooed over. And they have yet to elicit an offer. I know – you want to know how I can say the market is so strong in 2017 but there are also properties sitting on the market. The answer is simple. Some sellers got too greedy.
(I’m sorry, but if your neighbor Bob sold his house 4 months ago for $500,000 and your house is the exact same floorplan with a slightly nicer yard but in worse condition inside, where exactly do you get off thinking that you are entitled to $625,000 because you’re including a faux-stainless steel microwave and a garden gnome? We’re real estate agents, not magicians. And buyers? They’re savvy, not morons.)
Today, maybe one in ten listings will have an offer deadline noted on the day the property is listed. The other nine are waiting through the weekend to hold the infamous open house to gauge interest before setting a deadline. No matter how strong the market, there are new rules to the game. And we (well, you) have to figure out how to play
My personal feeling on a property listed with no deadline is that it’s fair game. If my client wants to write an offer an hour after it’s been listed, I’m going to write it and submit it. Why should they wait until after the Sunday open house for a deadline? I always contact the listing agent who always encourages me to write up the offer. It’s always the same thing: “We don’t have any offers in hand right now but if your client presents something that is too good to pass up, my client will look at it.”
Of course, they will look at it. It’s likely one of the biggest investments they will ever own, why wouldn’t they look at it? Their whole purpose in listing their house is to look at offers.
My client gives me their terms and I write that bad boy up and send to the listing agent. And this is where things get interesting, because no matter what the offer says, the listing agents always say the same thing: “The seller decided to wait through the open house to give everyone a fair chance to see the property.” One agent told me he already had the ads set to run in the paper. The what?
Anyway, what happened? This isn’t the playground. We don’t all have to have a turn. But, okay, you pick yourself up, dust off and try to regroup. What happens now and what could you have done differently if you really want the house?