sellers market

How to WIN in multiple offers

by John Rice

Had a client who wanted to see a house this weekend.  Called the listing agent.  The place already had 3 offers on it.  That is happening more and more these days.  So much so that I thought this might be a good time to talk about how to WIN in multiple offers.

Most people think in terms of outbidding somebody.  Sure, more money is always nice, but when there are two offers that are very close in the offer amount, I normally see a seller look to secondary things.  If Buyer A and Buyer B are $1000 apart, most sellers start asking things like:

  • “How solid is their financing?”
  • “When do they want to close?”
  • “How much of a down payment do they have?”

The seller then picks whichever buyer seems most likely to get this deal to the closing table.

What are some things you can do to make your offer more appealing in this situation?

  • Inspect the house, but let the sellers know you will not be asking for any repairs.  ALL sellers hate doing repairs.  They are too busy packing to deal with it.  Most of the time, a seller just does $500-1000 worth of repairs anyway, and they usually don’t care much about how well the job was done.  It is just something they want to cross off their to-do list.  Just do those yourself and brag to your friends how you beat the other buyers and got the house.  IF the house is a hot mess, you walk away from the deal after the inspection just like you would have done anyway.
  • Find out when the sellers ideal closing date would be.  If possible, give them the time that is best for them.   Sellers are under their own stress from moving and packing.  Making it easier on them makes you more attractive to them.
  • Let’s face it.  If you are in multiple offers and really want the house, you are already going to your max offer…may as well add some personal stuff in a letter to let the seller know how much you like the house.  Sellers usually love their house and want to see it go to somebody that they think will love it too.  In multiple offers, you have no room for negotiation so I see nothing wrong with showing your cards as long as it benefits you.
  • And some stuff that seems obvious:  Don’t ask for personal items like the seller’s grill or patio furniture.  Don’t ask for things that were not listed as coming with the house.  Don’t try to pressure them to respond quickly because in multiple offers, it is their world and you are just living in it.

This is soooooo different than it was several years ago when I was blogging about how to squeeze the desperate seller out of every last penny.  Times do change.  Sometimes you are the bug and sometimes you are the windshield.  That’s why it is always important to buy a house that will be desirable in both a good and bad market.

LEXpert first time buyer advice

by John Rice

The most important house you buy will be your first one.

It will be the one that sets you up for the next house and the next one and so on.  You want to carry as much equity into your next house as possible.

Buy a good one and it should be easy to sell when you want to move up or take that dream job out of town.

Buy the wrong one and it can be like having an iron ball shacked around your leg.

The hardest thing for most buyers, especially first time buyers, is to think about the exit plan.  One day, you will want to sell your house as much as you wanted to buy it.

Here are some unchangeable features that are often deal killers:

1.  Steep driveways.  Kids can’t play.  Nobody wants to slide down it in the winter.

2.  A bunch of small rooms.

3.  A busy road, either in front or back.

4.  A sloping backyard.  Slopping downhill from the house is a little better than sloping uphill.

5.  Noise.  Could be a bus stop, traffic, a train.

6.  Lack of privacy.  People do not want to be in their backyard and feel like they can’t scratch their butt without a neighbor seeing them.

Keep in mind that in a fast market, ANY house will sell.  We are in a market like we were in 2005 where there are not a lot of choices.  Buyers are feeling happy to get any house.   Many people who bought 2nd tier houses back then realized their mistake in the bad market of 2007-2012.  Just because the market is hot now does not mean it always will be.

If you are a home owner who has a 2nd tier house, then now is your time to sell it!

Reading the tea leaves when your house isn’t selling

by John Rice

House not selling? Wondering how to interpret what is going on? Here are a few of my thoughts on some common situations. The following assumes your house is being presented well online with plenty of good pictures and marketing remarks that describe it with more than trendy generic AI generated verbiage.

The house that gets lots of showings but no offers

Assuming that you don’t have some negative that wasn’t obvious like backing to a highway, apartments, or having an Eiffel Tower looking electrical thing in your yard, this situation simply means that the house doesn’t live up to what buyers expected. The good news with this one is that buyers think the price for what they thought the house would be is okay or else they wouldn’t come at all. The solution here is to either lower the price or improve the house so that it meets the expectations buyers have. Whichever is easiest.

I once had a condo that got tons of showings. I kept encouraging the seller to paint. Once we did, it sold. I recently had another listing that was getting tons of showings. It was a nice place, but just felt like a 15 year old house that needed a fresh vibe. The seller did some painting and replaced the flooring in all the bathrooms. As soon as it was done, it sold. Both of these places looked great online, and just needed to match what buyers thought they were getting. Both were improved for far less than the price reduction we would have needed, so both sellers actually came out better by going that route.

The house that gets no showings

This one is easy, but hard for sellers to accept. The price is too high. If a house is presented well on the MLS, and still nobody comes to see it, all you can do is lower the price. Real estate is all about price, location, and condition. You can’t change the location, but the other two you have some control over.

Also something to think about is this: If you have a $400k house and you’re asking $475k for it, buyers are comparing it to other houses that are really worth the asking price. The buyers who are going to spend what your house is really worth aren’t even going to see it since the list price is over their budget.

The house that gets the same bad feedback over and over

This is the least fun thing that can happen to a seller. I mean, they get kicked out of their house for showing after showing with no offers AND get to hear what people hate about their house.

Several years ago I had this really cool older house that had been mostly remodeled. It had the smallest living room I have ever seen……must have been the smallest anybody had ever seen since that is all I kept hearing after the showings. I’d ask for feedback and the buyer’s realtor would go on and on about how beautiful the place was, how unexpected it was to have walk-in closets in such an old house….then they would say their client wasn’t going to buy it since the living room was so small.

We tried putting in smaller scale furniture, but that didn’t help. After that, all we could do was drop the price. A price reduction opens the house up to a larger pool of buyers as well as enticing them to overlook a shortcoming if they are getting a better deal. We got that one sold too.

If you have a situation that doesn’t fit into these scenarios, give me a shout and I’ll let you know what to do.