If One Offer is Good, Then Multiple Offers are Very Good–

Mike Vickrey
Published on September 25, 2018

If One Offer is Good, Then Multiple Offers are Very Good–

 

 

 

Would you gamble with someone else’s property?

As a real estate agent I often deal with people in tense situations.  They are tense situations because they have outside pressures coming to bear on them and they respond by needing to buy or sell a home.  That is always part of my initial interview.  I call it the “what if” scenario.   What if your house sells tomorrow, where are you moving to?  What if your home doesn’t sell in your time frame?  What is the absolute least you can take for the home and still pay off the mortgage etc.?

Everyone poo-poos those questions away, but I insist on answers.   No one thinks the house will sell in three days…until it does.   Believe it or not, most sellers think the sales price is a math problem.   What I owe, plus closing costs, plus commissions, plus “what I need to net to move to my next house” and that is the sales price (plus 2 or 3 percent so we can negotiate the price down some, right?).   That math problem right there rarely, if ever works.    But there is an expectation that it does.  At least you start the process of the seller asking herself those questions.

But occasionally, a little twist is added to the game, a situation where you get multiple offers .  It keeps it interesting for the seller, who nearly always does better in a multiple offer scenario than if a single offer comes in;  and downright informative for me.   Case in point- –

A few months ago I had a home on the market.  It was showing a lot, but no offers.  I suggested a modest price reduction and within days we received multiple  offers.   Jackpot!  They weren’t necessarily great offers, but offers nonetheless.

I made calls to both agents and told them of the multiple offer scenario that had occurred and gave both 24 hours to provide their best/highest offer.   This is great because the first thing that happens is that all the trifling contingencies get taken off the table.  No protracted hand wringing, or offer/counter offer scenarios.

About 20 hours into it, I get a call from the agent who sent the first offer.  “Yeah, we are going to go with our original offer.”  The part that she didn’t say was, “cause we think you are bluffing.”  There is generally at least one agent in a multiple offer scenario that doesn’t believe anyone else is involved.

Since I didn’t have the second offer I just said “okay” and that I would get back to them after the period expired.

Well offer number two comes in and it is a little better than full price.   The offer’s cover page state “We want this house, no matter what!”

The time period expires, I send both to the owner who responds by taking the highest/best offer, as any of you would, barring some exception reason to do otherwise.

I make my two calls.  First to the winner, who is ecstatic.   Second to the not-winner.  First thing she says is “I didn’t really think there was another offer on the table.  I thought you were just trying to push the price up.  We WOULD HAVE OFFERED MORE if we had known there was another buyer.”

Although I may gamble a little bit (okay the occasional poker game with a $20 limit) I gamble with my own money.  Could you ever see yourself gambling with someone else’s money?    Someone else’s new home?   I have to believe that she gave her assessment of the situation to the buyers with her impression that there was no other “real” offer on the table.   Now what does she do?  Go back and say, “Ooops!  I guess there was another offer.  Your offer wasn’t accepted, I am sorry.”   Were I her broker I would be checking to make sure my malpractice insurance was up to date.

I make it a practice to only gamble what I can afford to lose…which is generally $20.00.  Having been on the buying side of a multiple offer scenario, I have only one answer for my buyers when they ask…and they always ask, “Do you really think there is another offer?”   My response takes me out of the decision-making loop completely.   “How are you going to feel in 24 hours if there is and you don’t get the house?”   If someone is going to bluff with such a huge pot at stake, it is going to be someone else.

 

If One Offer is Good, Then Multiple Offers are Very Good–
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