how to win in multiple offers

What is the 2025 Spring Market Like?

by John Rice

I have no idea what the rest of the year is going to be like in real estate, but the spring 2025 market is super hot in and around Lexington Ky.

I have sold 12 houses in the past 9 weeks. I think that might be a record for me. Five have been cash purchases. Five have been in multiple offers. Two went $60,000 or more over the list price.

If you see a new listing that looks amazing, be prepared to be in multiple offers and view the list price as the starting point for any offer.

Don’t want to get in a bidding war? Well, don’t look at houses that are newly listed. Stick with the inventory of homes that have been on the market for at least a week.

I am going to take a nap now.

    Backup offers are a bad idea except for this 1 reason

    by John Rice

    Backup offers.

    They seem appealing to buyers who missed a house they wanted.

    However, they are 99% of the time, a bad thing to do.

    Why?

    1. It ties you up. You have an accepted contract on a house contingent on the primary buyer’s contract falling apart. Should another house come on the market that you want to make an offer on, you have to rescind your offer IF you have verbiage in your contract that allows you to do so. If you don’t have that language in the contract, you are stuck. You are missing out on houses you could get right now in hopes that the sale of one you previously missed will fall apart. This is a recipe for never getting a house.
    2. You are really helping the seller more than yourself. Think about it from the seller’s perspective. You are putting them in a spot where they have two people wanting the house. If the primary buyer asks for repairs after a home inspection, the seller is just going to say “Look, I’ve got a backup contract. If you want this house you’ve gotta do what I want you to do. If not, walk away and I’ll just let the other buyer have it.”
    3. You are going to pay a premium. The seller has no reason to accept an offer less than the primary contract they already have. If you’re a seller with an accepted contract for $400k on your house, would you bother with an offer for $390k? This means you are most likely going to have to make an offer stronger than the offer they currently have with the primary buyer.

    When is that one single time when it might make sense? If the house is 110% exactly what you want and you are not going to be happy with any other house. If that’s they case, make that backup offer. Pay too much for it. Give the seller all the power. Pray the sale with the primary buyer falls apart. Then wait and see what happens.

    If the house is just a really nice one that you liked a lot, just keep looking. Another one always eventually comes on the market. Oh, and remember, the best way to not have to make a backup offer is to have been the strongest offer the seller got when it was on the market. Beat the other buyers when you have a chance. Be that primary buyer that another buyer hopes will not be able to close the deal.

    7 houses sold in 6 days!

    by John Rice

    It’s been a busy few weeks. After sitting on the couch for most of March and April, the market really came back strong. I knew it would happen, I just didn’t think it would happen so fast. I now have 14 pending sales. I sold 7 houses in 6 days last week…..which is why I haven’t blogged in a while. LOL, I went from having nothing to blog about to having no time to blog.

    As expected, most of those sales were in multiple offer situations so I thought I would tell you how I won some of them for my clients.

    These buyers were friends of mine who had been living out of the country for several years and were coming back home. Typical thing where the house had just come on the market. I knew the listing agent well. We have worked together multiple times. My buyer was preapproved with a local lender that the listing agent also knew. I was familiar with the house since I own one that is the exact same model. I don’t claim to be a home inspector, but I have been on probably 400+ home inspections and own enough houses that I can usually spot any deal breakers. I told my buyers, who REALLY wanted this house, that I was sure a home inspector would find the usual laundry list of items found in any house. I also told them that most sellers these days will only spend $500-1000 for repairs. I suggested we buy the house totally “AS-IS” without a home inspection. I know that can be scary for a lot of buyers but these clients were good friends who knew I wouldn’t steer them wrong. Since there was no huge issue that would cause somebody to walk away, all they were risking was losing out on the $500-1000 in repairs that a seller would do. We got the house!

    Another buying family was referred to me by a past client who had used me twice before. I knew that listing agent too. An art that seems to be lost on younger realtors is calling the listing agent and letting them know some things that aren’t on the offer. I told that listing agent that I had been working with my Buyers for a while and how sensible and reasonable they are. I also pointed out that they would be doing a Conventional loan and had 20% down and would not be asking for the seller to pay any of their closing costs. I did this because I was sure the price point of this house probably meant that the other offers were FHA/VA with little money down and asked the seller to pay some of their closing costs. Get this, the listing agent countered our offer because we did not have the highest price. He said if we could match the highest price, my people would get the house because their loan type and huge down payment seemed more of a sure thing than the other offers. We got the house!

    I sold a really amazing townhouse downtown to a friend. That was not in multiple offers since it was under construction. Another buyer who was referred to me from a friend bought 5 acres in Jessamine County. We did an escalation clause on that one to get it. The rest were listings.

    It has been a busy two weeks but it felt good and overwhelming to be thrown back in the deep end of the pool after the COVID-19 Staycation.

    Winning in multiple offers

    by John Rice

    Two of the three houses I sold last weekend had multiple offers.

    I’ve always said that what often wins a house in these situations has nothing to do with price.  It is even more true in today’s market where almost every house sells for full price or slightly above.  I know when I get multiple offers on my listings, it is amazing to see several different buyers all offer roughly the same amount, especially when it is over the list price.

    The first one I sold was a for sale by owner townhouse.  I knew the seller probably didn’t know what to do once he got an offer, and probably didn’t know how to determine which buyer was the best.  So, I told him that I would handle everything for him and keep him in the loop on the progress of the sale.  I also pointed out that my buyer had 20% down and was doing a conventional loan. I told him all the things that could go wrong with any sale, and that short of a cash buyer, my well qualified buyer would be the best one to pick.

    And he did.

    The other one was a hot new listing near Hamburg in the most competitive price range in Lexington.  There were 9 showings the first day on the market.  My buyers needed to roll their closing costs into the offer, so I was a little worried.  I knew the only chance I had of getting this place for my buyers was to find out how to make it easy on the sellers to say yes to us.  I asked the listing agent if the sellers knew where they were moving yet.  If they did not have a house yet, my people could have rented back to them after the closing because they had several months left on a lease.  The sellers have a contract on a house in a surrounding town.  I got their closing date.  I remembered that they had two small kids based on the way two bedrooms were decorated.  No seller who is going to be a buyer likes the idea of moving out of their old house, closing it, closing their new house, and moving in….all in one day.  Especially with kids.

    We wrote a strong offer.  I put our closing date the same day that the sellers are closing their new home.  We also offered to let them have their old house for 48 hours after the closing just to make that process easier.

    Later that day, the listing agent called me.  She said both offers were practically the same.  So much so that her sellers jokingly asked her if she had told both buyer’s agents what to offer.  They couldn’t decide which offer to pick, so they asked their agent what to do.   She advised them to accept our offer because she thought I was so nice to work with and for my concern in making the process easy for her sellers.  Well, I am a nice guy, but my goal was to get this house for my buyers more than it was to make it nice for the sellers.  That is just what we had to do to make our offer the most attractive.

    So, both of my buyers got the house they wanted in multiple offers.  Like I’ve said before, it isn’t always about price.