- This is really not a 'retort' per se but rather, my personal response to some provocative questions posed by a young couple who frequent this Blog from time to time. (And the above title sounded a little more intriguing to me than simply, Answers To Real Estate Questions blah, blah, blah. ) It is worth mentioning too, that these readers also have a Blog chronicling their own attempt to sell a property that you can find by clicking on the Haloscan section in my sidebar. Their following questions address my two most recent 'Multiple Offer' postings--in short, the Buy Side and Sell Side of the 'Big M.O.'
Q. From a buyer's standpoint, how do you "really" know that another offer is on the table? I mean, do agents sometimes use this (whether legal or illegal) to get the buyer closer to the seller's asking price (or over)?
A. This is where your Buyers Agent needs to have a well trained snout. I can usually smell a fake M.O. a Chicago city block away but yes, Agents sometimes do fake an M.O. I just believe that the skill set is so advanced to pull this off successfully that one might just as well use these talents to do the deal correctly. And this includes a 'Correct Pricing' discussiion with the Seller at the initial Listing appointment.
Q. How does a buyer make sure that there is really another offer or if it is simply a tactic to drive up the price?
A. I'm not sure how a Buyer can make sure but as a Buyers Agent, I have a small aresenal of multi-tiered questions I ask the Listing Agent in rather rapid fire fashion. (For me to proceed and reveal my 'weapons' an Exclusive Buyers Rep Agreement needs to be signed now!) One good way though, is not to change your offer at all during the second 'go round' of the M.O. If you don't get the property then you'll definitely know.
Q. From a seller's perspective, I've heard agents say, "Sometimes the first offer is the best offer.."
A. A Real Estate cliche, to be sure. But if a house is on the market 247 days before the first offer comes then guess what...? It is the best offer, end of story. Any offer under 30 days should be considered a gift and handled with care. I believe that "for every offer there is an equal and opposite re-offer" so the 'Counter-Offer,' a subject for a future post, is almost always in order in cases other than the M.O. Coming back with your Highest and Best in an M.O. is not a counter offer but rather, a repsonse to a 'No Counter' as the Sellers's position hasn't changed at all.
Q. What should a seller encompass during a M.O. to determine the right decision? Is it price, earnest money, etc? I've heard stories about sellers choosing an offer based on price and then the buyer pulls out within the five day period and thus the seller's start from square one. What are your thoughts on this?
A. Who's the Boss?....The Situation. The Situation is always the Boss. Having said that, Price, Earnest Money and Close Date rule in a Multiple Offer. Make sure your offer Price is right and the terms are tight. Keep Contingencies to a bare minimum without seriously jeopordizing your Earnest Money. Know your financial limits but just as importantly, know what you're prepared to live with if you lose out on the deal. Multiple Offers often times go 2-3% above List Price. This answer is obviously intended for the Buyer but I think you can gain some insight as well from a Sellers vantage point. As far as the second part of this question; when a deal starts to go sideways during the Attorney Review Period make sure your legal representation has a few teeth in their mouth. The sharper the better.
polygraph photo by police-test