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You are here: Home » 2018 » January

MULTIPLE OFFER STRATEGIES

When a listing receives multiple offers, my buyer clients will ask me, “If we aren’t the highest, offer, they’ll counter us, right?” Unfortunately, that doesn’t always happen. There are no hard-and-fast rules in how agents handle multiple offers. Sometimes they go through several rounds of counter-offers and they include every offer that came in, or they’ll just counter the top offers. Or sometimes they just take the highest and best first offer.

 

Whenever there is more than one offer, it can be a very fluid situation. Once buyers find out there is competition for the property they can improve their offers. This means that the “best” offer can quickly get leap-frogged by another offer. It can get to be like an auction environment with buyers upping their offer, or they get discouraged and withdraw their offer suddenly if they think the price is escalating too quickly.

 

The key idea for buyers to take away is that you shouldn’t assume that you will get another shot at it later. I know some buyers want to start low so they can work their way up on price later through the negotiating process. This can backfire if someone else comes in with their highest offer right off the bat and the seller just accepts it without countering.

 

Sometimes we find out what the highest offer is. Buyers can’t just assume that if they match that offer the seller will switch to them (assuming everything else is the same). Most sellers feel some allegiance to the buyer that came in higher initially instead of being talked into coming up later.

 

I am NOT recommending that you “overpay” for a home. My point is that if you’ve been looking for a while, and you have specific needs and you find the “perfect” home for you, come in with a strong offer to start with.

 

If you have questions about real estate, call me at (925) 240-MOVE (6683). Voted “Best of Brentwood” multiple times. To search the MLS for free, go to: www.SharpHomesOnline.com. Sharp Realty. #01245186

SELLING TO TENANT

Let’s say you’ve been renting out a home for several years to a tenant. They approach you about buying the property and you are interested. There are some things to consider.

 

First, this should be handled like a regular sales transaction with all the paperwork for your protection. The only difference is that it won’t be listed in the MLS as an active listing so other buyers won’t have a chance to compete for it. But you should do all the normal disclosures and the tenant should do all their normal inspections. You should strongly consider using a real estate agent to represent you but of course it would be fair to ask for a reduced commission in this case.

 

The second issue would be price. The tenant usually wants to come in low because they think you are “saving” the commission. Per my comment above, you may still be paying something. And then also consider that you could be leaving money on the table by not exposing this to the market. So, unless you really want to do the tenant a favor, I like these transactions to go out closer to market value than at a big discount. Remember that you BOTH can’t “save the commission,” at least, not all of it. If it sells for market value minus X%, the BUYER just saved the commission and you netted about the same.

 

The third issue to consider would be whether you have a property manager. If so, it’s likely there is a clause in their contract that if the tenant buys the property, the property manager will handle the sale and their pre-printed form often lists a 6% commission rate. So, read your property management documents carefully before you move forward with this sale. Otherwise you may find a big surprise at the closing table!

 

If you have questions on this or any other real estate topic, call me at (925) 240-MOVE (6683). Voted “Best of Brentwood” multiple times. To search the MLS for free and view virtual tours of homes for sale, go to: www.SharpHomesOnline.com. Sharp Realty.

 

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  • Sharp Realty
  • 320 Fairview Ave.
  • Brentwood CA 94513
  • P: 925.240.6683
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  • DRE# 01858431