I have been on both sides of an offer in multiple offer situations. Whether I am the listing agent or buyer agent I often see buyers view the news of multiple offers with incredulity. More often than not, they just don't believe it. If they think that the news is just a trick to get them to raise their offer and they hold firm, they often lose the house.
While I don't dispute the existence of dishonest licensees who fabricate competing offers, in my experience the overwhelming majority of multiple bid situations are legitimate. There are two main reasons for this:
- If you like a well priced, well cared for, updated house in a good location, then the chances of someone else liking it are fairly high. The notion that a buyer's market is devoid of anyone actively looking but you is inaccurate. This is still the USA. There are still people looking to buy a home.
- The consequences of fabricating a false competing offer are catastrophic. Suppose the agent lied about another offer to get you to raise your bid and it backfired-instead of raising your offer, you instead withdraw it. That agent just lost their commission, and will look pretty silly when the house never goes under contract in the MLS. Few listing agents would risk losing their entire commission and reputation when a solid sale is within their grasp. Moreover, if the seller found out, they could rightly get the agent in huge trouble with the law and real estate board. It makes no sense to take that risk, even if you don't have scruples.
There have been a few times when a listing goes from 2-3 offers to nothing, and that is as rare as it is rough. But it does happen. We've had multiple bid situations where the deal we accepted didn't perform, and the other offers moved on to other homes leaving us with nothing. To outward appearances it looks bad. But it does happen, and as hard as we strive to have the seller go with the best buyer, you don't know how buyers will behave until you engage them.
Westchester has a lot of really nice communities with built in demand that transcends the economy. Buyers will go for the nicer homes at the same time even in a slow market. It may seem coincidental, but in most cases coincidence is just a reflection of the reality on the ground. If you have you eye on the prettiest girl at the dance, you probably aren't alone. The same goes with the best deals. So if you see one you like, remember that if you like it, it may appeal to others. Plan your actions accordingly. The times are on your side.
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- J. Philip Faranda, Broker-owner, J. Philip Real Estate, LLC. 2010 Vice President, Westchester-Putnam Multiple Listing Service.
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I agree. People are skeptical that there could be more than one offer, but you are right--if it is a good deal, others will think so too. I always wonder if I should share my opinion on that or if they will just think I am saying it to get them to move (which I never do) but it is disappointing when buyers find something they like, only to find out that it is under contract the next day.
Great points here. In my area of Southern California, multiple offers range from 15 to 150 per house. Our inventory has become so frighteningly low that the buyers are out bidding each other and it should be a reality show sometimes. I do find though, that MOST of the buyers (in my humble opinion) are legit. There are, however, the occasional bad seed that always backs down when push comes to shove.
Majority are real and for the reasons you have described so thoroughly. The best deals sell, so you have to play to win or else... you will not.
J - I know there are always a few rotten apples out there. Just like Jean said sometimes we are getting up to 150 offers per house. And like you, it is for the homes priced well, clean, and ready to go. Take care!
We had a local realtor concoct a 'phantom offer' which motivated the other Buyers to up their offer. They won and then found out what he did and ended up sueing him, the brokerage and then the agent was fined but did not lose his license over it! Now, we have new procedures in place for any multiple offer situation. Of course the media went into a feeding frenzy over it and our Buyers are highly suspect when told of a multiple offer situation - can you blame them?
our MLS board has a multi-offer disclosure form in which all parties signatures are required!
buyers,sellers,agents!
it's all on paper - here are the people involved= you are all on notice and it's disclosed....bring your best offer forward please within the defined time period:)
may the best offer win
and it does
no bluffing needed lol
Hi Phil, Nice post and it is still happening. Happened to my buyer client a few weeks ago. Something people do forget is that often a house that needs TLC sits there - buyers are waiting for it to go lower in price. When someone finally steps up to the plate with an offer (my clients) the lising agent may contact people who have been on the fence trying to decide. Now, different points of view about this, but it is the listing agents job to get the best offer (sale Price, terms, etc) for his client, the seller. In this case, the agent was able to have 2 other offers submitted - my buyer didn't get the house - they decided to stay with their price. They are very happy they did that, this past weekend we wrote on something they liked much better. They believed me that if they considered the house, other people would too.
I loved the pretty girl at the dance analogy!