Author Topic: Post follow up: immediate full price offer!!!!!!!!  (Read 7351 times)

Case

  • Pencil Stache
  • ****
  • Posts: 755
Post follow up: immediate full price offer!!!!!!!!
« on: February 27, 2018, 07:04:26 PM »
This is a follow up to my post from earlier today:

https://forum.mrmoneymustache.com/ask-a-mustachian/balancing-real-estate-agents-advice-versus-incentives/

Ok, so we listed the house today, immediately (like within 5 min) received a request to view it.  We showed it an hour or two later, and received a full price offer within an hour or two.  They are requesting we reply by 11:30 tomorrow morning.

We have another showing scheduled for tomorrow evening.  My agent thinks the first offer is usually the best but also thinks it makes sense to wait.  Zillow is going in insane with views.  The first buyer is probably scared of a bidding war.... we want a bidding war!

I know there isn't much detail, but what do you think?  Take it?  Wait for more?  With that much interest lined up, I'd think it would make sense to wait for more, though we also want this to finish up fast.  We have an open house scheduled for Sunday. I don't know if we can wait that long... then again, we can wait as long as we like!  I guess i don't know how long people wait (after making an offer) before they get pissed and walk.

Meanwhile, we're doing this through a relocation company.  I don't believe we are actually able to accept by tomorrow because we have to wait for inspection results to come in.

I can't share details on my house, but I wish I could.  I am ultra sad to sell it.  It is a dream house, which is only affordable because it is in a low COL area, where this certain style of house flourished in the 50s.  It is in fabulous shape... it is a wonderful deal.  In a high COL area, it would sell for 4x what we are listing for at least.

Stimulation overload!!!

shelbyautumn

  • 5 O'Clock Shadow
  • *
  • Posts: 99
  • Age: 29
  • Location: Mississippi
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #1 on: February 27, 2018, 07:16:10 PM »
Where are you located?

My husband and I sold our home last summer in Colorado Springs. We ended up with 4 offers over 3 days and each was better than the last. We ended up with an all cash offer $13k over asking. In my experience, I don’t think waiting is a bad idea, but I also get that it’s hard to reject the full price offer!

Case

  • Pencil Stache
  • ****
  • Posts: 755
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #2 on: February 27, 2018, 07:19:47 PM »
Where are you located?

My husband and I sold our home last summer in Colorado Springs. We ended up with 4 offers over 3 days and each was better than the last. We ended up with an all cash offer $13k over asking. In my experience, I don’t think waiting is a bad idea, but I also get that it’s hard to reject the full price offer!

Basically our agent has instilled us with fear that the seller's will walk with we don't accept fast.  We are aware of how agents are incentivized for fast sales... at the same time we perhaps foolishly kind of trust them (we have two agents... long story).

I'd prefer not to give my location, but it's not Colorado Springs.  Small town in somewhere USA ;-)

Papa bear

  • Handlebar Stache
  • *****
  • Posts: 1215
  • Location: Ohio
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #3 on: February 27, 2018, 07:24:55 PM »
Wait.  Once you get a bunch of people in, have the realtor give all interested parties a chance to give their "best and final" offer.  Then negotiate with the best offer and keep #2 warm in case something happens


Sent from my iPhone using Tapatalk

birdiegirl

  • 5 O'Clock Shadow
  • *
  • Posts: 95
  • Location: Minnesota
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #4 on: February 27, 2018, 07:27:09 PM »
Can your agent just ask for more time to respond?  I can't see how it would be unreasonable to ask for 24-48 hrs.  If the buyers love the house they won't walk away that fast. 

When we bought our house we were that first full price offer just hours after it hit the market
.  Sellers stalled multiple times to get more offers but accepted 3 or 4 days later after lots of showings but no other offers.   We were serious buyers, and if yours are too, they'll be ok with giving you a little more time to respond. 

MayDay

  • Magnum Stache
  • ******
  • Posts: 4019
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #5 on: February 27, 2018, 07:28:38 PM »
I would definitely respond to the offer. It is shitty to leave them hanging.

However that response can be that you are reviewing offers until Sunday at 5 pm, and if they have a compelling reason to need to know sooner, they should make their final and best offer now and you will consider it.

When we were relocating, we were in town for three days. We needed to hear back ASAP to make it happen. The shitty sellers jerked us around. I'm still pissed.  (We ended up getting the house because they didn't get my other offers but it was a huge headache requiring separate trips, compared to if they had just been up front about when they would get back to us).

Scrapr

  • 5 O'Clock Shadow
  • *
  • Posts: 23
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #6 on: February 27, 2018, 07:56:47 PM »
You know what this means right?

You priced it too LOW!!!

besides the full price are there other contingicies? You can get killed on the repair "requests". We sold our home 2 years ago. I was very very worried about the repair list. 23 year old roof & furnace. As soon as they passed on them i could not sign fast enough

FINate

  • Handlebar Stache
  • *****
  • Posts: 1371
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #7 on: February 27, 2018, 08:02:45 PM »
You need to watch this short video: https://www.youtube.com/watch?v=n0rV3ydBhUw

sol

  • Walrus Stache
  • *******
  • Posts: 8492
  • Age: 42
  • Location: Pacific Northwest
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #8 on: February 27, 2018, 08:06:59 PM »
I agree that you priced to low.  Fortunately, you have all of the power here and can fix your mistake by waiting for other offers to come in. 

House sales are auctions.  Regardless of your listing price, you want to find the highest bidder.  How can you know who that is if you sell to the first offer that comes in?

Another Reader

  • Walrus Stache
  • *******
  • Posts: 5082
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #9 on: February 27, 2018, 09:38:19 PM »
As I said before, your listing should say all offers will be reviewed Tuesday evening.  By not doing that, you did not take advantage of the auction process.

At this point, your agent should be telling other agents that call that you have a full price offer in hand and they are welcome to show the property and bid higher.

Relocation agents are hired to get a sale and get it closed fast.  That saves your company money and gets you to the new job site ASAP.  That approach conflicts with you wanting the best price for your property.

obstinate

  • Pencil Stache
  • ****
  • Posts: 899
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #10 on: February 27, 2018, 10:02:07 PM »
Would probably wait. Buyer probably doesn't have a real deadline tomorrow. Worst case you go back to them and give them a 2% price reduction to come back to the table.

There is a formula that tells you the right time to accept an offer. Search up the optimal dating algorithm. The main trouble is estimating the total number of offers you expect to see. 

lhamo

  • Walrus Stache
  • *******
  • Posts: 9838
  • Location: Seattle
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #11 on: February 27, 2018, 10:33:13 PM »
In the hotter than Hades Seattle market listings go up on Thursday or Friday, with offer review dates typically being the next Tuesday or Wednesday.   Everybody wants a bidding war, which they usually get.

I would tell the people making the first offer that you will review all offers on Monday (after the open house). 

Case

  • Pencil Stache
  • ****
  • Posts: 755
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #12 on: February 28, 2018, 05:33:33 AM »
In the hotter than Hades Seattle market listings go up on Thursday or Friday, with offer review dates typically being the next Tuesday or Wednesday.   Everybody wants a bidding war, which they usually get.

I would tell the people making the first offer that you will review all offers on Monday (after the open house).

We are most definitely not in Seattle, but small town USA.

There is a small but passionate group of people interested in our style of house.

Case

  • Pencil Stache
  • ****
  • Posts: 755
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #13 on: February 28, 2018, 05:36:27 AM »
You know what this means right?

You priced it too LOW!!!

besides the full price are there other contingicies? You can get killed on the repair "requests". We sold our home 2 years ago. I was very very worried about the repair list. 23 year old roof & furnace. As soon as they passed on them i could not sign fast enough

It’s possible we did, with the caveat that the home appraisal may come back below the asking price, in which case we have to deeal with that. The dichotomy of theaccuracy of appraisal price and actual market value...things you deal with in a small conservative town.

Case

  • Pencil Stache
  • ****
  • Posts: 755
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #14 on: February 28, 2018, 05:40:52 AM »
Would probably wait. Buyer probably doesn't have a real deadline tomorrow. Worst case you go back to them and give them a 2% price reduction to come back to the table.

There is a formula that tells you the right time to accept an offer. Search up the optimal dating algorithm. The main trouble is estimating the total number of offers you expect to see.

 Correct, the did this knowing the house was a good deal and are trying to nab it before it has other people seeingi it in order to reduce competition.

We dont intend to prolong this,but we want atleastacoupledayson market.  Plus,k we are required to work thruthe relo companywhich prolongs this anyways whether we like it or not.

Reynolds531

  • Bristles
  • ***
  • Posts: 298
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #15 on: February 28, 2018, 06:46:33 AM »
Passion equals money! Squeeze those buyers!

Also liking your agent does not mean his interests are aligned with yours. He can get you an extra $10 k and earn $500. Or he can spend the time selling another house and earn $5000. Which do you think is his priority?

Capt j-rod

  • Bristles
  • ***
  • Posts: 339
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #16 on: February 28, 2018, 06:59:22 AM »
Something is worth what someone else will pay on the day you need rid of it. If you are offered your asking price then sell the house. Work on shedding the closing costs and fees and relax after the sale. If you wanted more than you should have asked for more. Have you ever offered more than the sticker price on a car? Come on people these games will ultimately piss off a buyer and you will end up selling for less. There is value in not having to hassle and haggle. You got your price, take your money and move on. Do not turn away any potential buyer during this process. Just because they offered doesn't mean it is a done deal.

Slee_stack

  • Pencil Stache
  • ****
  • Posts: 854
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #17 on: February 28, 2018, 08:59:32 AM »
I had a not dis-similar situation.

Contract #1:
Went on market.  Received an offer first week.  Good traffic.
I leveraged the first offer against the high-level of interest and basically got full asking..
I went under contract with that first offer.  They came back and demanded a bunch of ridiculous repairs (replace 12 y.o roof, replace all windows...one had one broken seal).
They tied the house up for 3 weeks and we went our separate ways.

Contract #2
Back on market and got another offer.  Same net price after basic negotiation (again...still high level of interest).
My agent was a little concerned since he was unfamiliar with the lender.
Received a laundry list of Repairs demanded.  No crazy high dollar ones so we just went and fixed a bunch of them.
Financing fell through a week before closing.  Apparent his 'self-employed' salaray may have been inflated.
House tied up for an additional 5+ weeks.  Got to keep the earnest money. NOT worth the holding costs and time spent on list of repairs though.

Contract #3
Still very high traffic, but no offers.  Finally get one about 3% net lower.
Took it.  A couple other minor repairs.  Made it through closing 5 weeks later.
What a freaking hassle.  4 months on market with about 3 months under contract.


Be careful that you aren't chasing the last dollar.  Sell the albatross as fast as you can...

PoutineLover

  • Handlebar Stache
  • *****
  • Posts: 1199
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #18 on: February 28, 2018, 09:05:35 AM »
My mom sold her house last year. Listed it for much more than she paid 2 years prior. Received full price offer almost immediately, still had other viewings scheduled. Couple days later, got an offer over asking, and then another even higher. Accepted the highest bidder. If there's a lot of interest and the market is good, I'd wait a little longer and give a solid deadline for a response, then take the best offer at that point.

Case

  • Pencil Stache
  • ****
  • Posts: 755
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #19 on: February 28, 2018, 09:42:47 AM »
This is a follow up to my post from earlier today:

https://forum.mrmoneymustache.com/ask-a-mustachian/balancing-real-estate-agents-advice-versus-incentives/

Ok, so we listed the house today, immediately (like within 5 min) received a request to view it.  We showed it an hour or two later, and received a full price offer within an hour or two.  They are requesting we reply by 11:30 tomorrow morning.

We have another showing scheduled for tomorrow evening.  My agent thinks the first offer is usually the best but also thinks it makes sense to wait.  Zillow is going in insane with views.  The first buyer is probably scared of a bidding war.... we want a bidding war!

I know there isn't much detail, but what do you think?  Take it?  Wait for more?  With that much interest lined up, I'd think it would make sense to wait for more, though we also want this to finish up fast.  We have an open house scheduled for Sunday. I don't know if we can wait that long... then again, we can wait as long as we like!  I guess i don't know how long people wait (after making an offer) before they get pissed and walk.

Meanwhile, we're doing this through a relocation company.  I don't believe we are actually able to accept by tomorrow because we have to wait for inspection results to come in.

I can't share details on my house, but I wish I could.  I am ultra sad to sell it.  It is a dream house, which is only affordable because it is in a low COL area, where this certain style of house flourished in the 50s.  It is in fabulous shape... it is a wonderful deal.  In a high COL area, it would sell for 4x what we are listing for at least.

Stimulation overload!!!

Ok, we are having a millions showings today, hopefully more offers come as a result.
The plan is to tell people to give their 'highest and best' offer.

Case

  • Pencil Stache
  • ****
  • Posts: 755
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #20 on: February 28, 2018, 09:49:21 AM »
Something is worth what someone else will pay on the day you need rid of it. If you are offered your asking price then sell the house. Work on shedding the closing costs and fees and relax after the sale. If you wanted more than you should have asked for more. Have you ever offered more than the sticker price on a car? Come on people these games will ultimately piss off a buyer and you will end up selling for less. There is value in not having to hassle and haggle. You got your price, take your money and move on. Do not turn away any potential buyer during this process. Just because they offered doesn't mean it is a done deal.

We are not jiggling around the buyers; we are keeping it very fast and simple; a pool of buyers will get a chance to give their best offer.  They should know that there already is a high offer on the table, otherwise they miss out on an opportunity otherwise.

People do give more than asking prices on houses, especially unique houses in high demand.  It doesn't happen on cars because cars are made in factories and there often much of a supply vs demand issue.

Anyways, there is a risk that the original people will get pissed, but they put in a very aggressive offer trying to cut us off from competitors.  It is not typical to ask for a decision within ~12 hours, especially when most of those hours are spent sleeping.

After we get the offers, we are not going to haggle back and forth.  We will take the highest/best offer.  If a good offer doesn't come in, then we will proceed with the open house.

Keep in mind our house has been on the market <24h.

boarder42

  • Walrus Stache
  • *******
  • Posts: 7849
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #21 on: February 28, 2018, 09:55:26 AM »
Something is worth what someone else will pay on the day you need rid of it. If you are offered your asking price then sell the house. Work on shedding the closing costs and fees and relax after the sale. If you wanted more than you should have asked for more. Have you ever offered more than the sticker price on a car? Come on people these games will ultimately piss off a buyer and you will end up selling for less. There is value in not having to hassle and haggle. You got your price, take your money and move on. Do not turn away any potential buyer during this process. Just because they offered doesn't mean it is a done deal.

We are not jiggling around the buyers; we are keeping it very fast and simple; a pool of buyers will get a chance to give their best offer.  They should know that there already is a high offer on the table, otherwise they miss out on an opportunity otherwise.

People do give more than asking prices on houses, especially unique houses in high demand.  It doesn't happen on cars because cars are made in factories and there often much of a supply vs demand issue.

Anyways, there is a risk that the original people will get pissed, but they put in a very aggressive offer trying to cut us off from competitors.  It is not typical to ask for a decision within ~12 hours, especially when most of those hours are spent sleeping.

After we get the offers, we are not going to haggle back and forth.  We will take the highest/best offer.  If a good offer doesn't come in, then we will proceed with the open house.

Keep in mind our house has been on the market <24h.

agreed with everything here its a good approach - could it back fire yes but its unlikely.  Someone was watching for a house like yours to hit the market and they want it.

MissNancyPryor

  • Pencil Stache
  • ****
  • Posts: 527
  • Age: 50
  • Location: Northwest USA
  • The Stewardess is Flying the Plane!
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #22 on: February 28, 2018, 09:59:19 AM »
I have seen and been the victim of this:  If they have any contingencies at all you get to continue to show the house and accept a better offer if the first buyer doesn’t clear all contingencies in a freakishly short time (like 24 hours). 

sailinlight

  • 5 O'Clock Shadow
  • *
  • Posts: 86
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #23 on: February 28, 2018, 10:05:58 AM »
Agree, a no-contingent offer is worth a lot more than a high price. How much is up to you. If someone is coming in with a VA loan and has to sell their old house first, that's worth several percent or so less than a cash offer closing in 10 days.  I also suggest countering back with waiving an inspection contingency. Buyers will always ask for a few thousand dollars worth of fixes, so skipping that is very useful.

Trifele

  • Handlebar Stache
  • *****
  • Posts: 2384
  • Location: US
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #24 on: February 28, 2018, 10:29:07 AM »
I have seen and been the victim of this:  If they have any contingencies at all you get to continue to show the house and accept a better offer if the first buyer doesn’t clear all contingencies in a freakishly short time (like 24 hours).

I'm no expert, but we have bought and sold several houses and this has been our experience too.  Once a house is under contract, if there are any contingencies the owner can keep showing the house and accept a new offer with fewer contingencies. 

One time we looked at a house that was already under contract, contingent on the sale of another house + inspection.  We came in with a cleaner offer (our only contingency was an inspection -- we had no house to sell).   The first buyer with the contract was given 48 hours to clear their contingencies and buy the house straight up.  Unfortunately they did, and we missed out on that place.  It worked out great for the sellers though.  Which is why they were continuing to show and put the word out that more offers were welcome.

With your hot prospects OP I recommend that if you accept an offer with contingencies, try to make sure you can continue to show and accept other offers if you want to.

Scrapr

  • 5 O'Clock Shadow
  • *
  • Posts: 23
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #25 on: February 28, 2018, 10:51:08 AM »
You know what this means right?

You priced it too LOW!!!

besides the full price are there other contingicies? You can get killed on the repair "requests". We sold our home 2 years ago. I was very very worried about the repair list. 23 year old roof & furnace. As soon as they passed on them i could not sign fast enough

It’s possible we did, with the caveat that the home appraisal may come back below the asking price, in which case we have to deeal with that. The dichotomy of theaccuracy of appraisal price and actual market value...things you deal with in a small conservative town.

Don't worry about the pricing. It's just the normal selling process. But tell me as soon as that offer came in your first thought was too low!Darn it.  LOL

We priced our home a bit aggressive. Semi unique home. Showed well, but not the more open floor plans that are in vogue now. Little interest on the open house. Dropped below a $000 breakpoint and the 2nd open was mobbed. Got $5k over 2nd asking Initial pricing is a WAG.

The repair addendum was the worry for me
« Last Edit: February 28, 2018, 12:28:46 PM by Scrapr »

Papa bear

  • Handlebar Stache
  • *****
  • Posts: 1215
  • Location: Ohio
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #26 on: February 28, 2018, 04:35:46 PM »
Something is worth what someone else will pay on the day you need rid of it. If you are offered your asking price then sell the house. Work on shedding the closing costs and fees and relax after the sale. If you wanted more than you should have asked for more. Have you ever offered more than the sticker price on a car? Come on people these games will ultimately piss off a buyer and you will end up selling for less. There is value in not having to hassle and haggle. You got your price, take your money and move on. Do not turn away any potential buyer during this process. Just because they offered doesn't mean it is a done deal.

Bologna.  Bad advice.   You have no duty to the buyer to accept an offer even if it meets your asking price.

Duty to your realtor though? Maybe. Check your contract.


Sent from my iPhone using Tapatalk

Undecided

  • Handlebar Stache
  • *****
  • Posts: 1084
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #27 on: February 28, 2018, 05:31:04 PM »
Something is worth what someone else will pay on the day you need rid of it. If you are offered your asking price then sell the house. Work on shedding the closing costs and fees and relax after the sale. If you wanted more than you should have asked for more. Have you ever offered more than the sticker price on a car? Come on people these games will ultimately piss off a buyer and you will end up selling for less. There is value in not having to hassle and haggle. You got your price, take your money and move on. Do not turn away any potential buyer during this process. Just because they offered doesn't mean it is a done deal.

Bologna.  Bad advice.   You have no duty to the buyer to accept an offer even if it meets your asking price.

Duty to your realtor though? Maybe. Check your contract.


Sent from my iPhone using Tapatalk

I totally agree with Papa bear. It's a listing price, not an offer price. Its only purpose is to establish your obligation to your agent (i.e., in the case you reject all offers, you likely still owe the agent if you turned down a full-price offer with no contingencies) and put you in whatever position in the market you think will best serve your purpose as a seller. I disagree that you can conclude you priced it too low, too. Having a "full-price" offer in hand immediately primes other prospective buyer's agents to steer their clients toward making their best offers.

SwordGuy

  • Walrus Stache
  • *******
  • Posts: 5794
  • Location: Fayetteville, NC
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #28 on: February 28, 2018, 05:33:45 PM »
I had a not dis-similar situation.

Contract #1:
Went on market.  Received an offer first week.  Good traffic.
I leveraged the first offer against the high-level of interest and basically got full asking..
I went under contract with that first offer.  They came back and demanded a bunch of ridiculous repairs (replace 12 y.o roof, replace all windows...one had one broken seal).
They tied the house up for 3 weeks and we went our separate ways.

Contract #2
Back on market and got another offer.  Same net price after basic negotiation (again...still high level of interest).
My agent was a little concerned since he was unfamiliar with the lender.
Received a laundry list of Repairs demanded.  No crazy high dollar ones so we just went and fixed a bunch of them.
Financing fell through a week before closing.  Apparent his 'self-employed' salaray may have been inflated.
House tied up for an additional 5+ weeks.  Got to keep the earnest money. NOT worth the holding costs and time spent on list of repairs though.

Contract #3
Still very high traffic, but no offers.  Finally get one about 3% net lower.
Took it.  A couple other minor repairs.  Made it through closing 5 weeks later.
What a freaking hassle.  4 months on market with about 3 months under contract.


Be careful that you aren't chasing the last dollar.  Sell the albatross as fast as you can...

I feel your pain!

After my mom passed, I put her house up for sale.

1st Contract, 1st buyer, 1st Closing date:

Everything looked good until a few days before closing.  The bank doing the lending to the buyer was bought and all the existing paperwork was no good because it had the wrong bank name on it.   Couldn't close.

1st Contract, 1st buyer, 2nd Closing date:


Lending bank decides they want a document from the judge that handled buyer's divorce.   Judge doesn't respond by closing date.  Couldn't close.  Put back on the market.

2nd Contract, 1st buyer, 3rd Closing date:

Finally sold it to the original buyer.

Fomerly known as something

  • Pencil Stache
  • ****
  • Posts: 776
  • Location: Midwest
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #29 on: February 28, 2018, 05:56:39 PM »
Is it a reasonable offer?

If it is reasonable, than take it.  If it is less than you want don't.

I recently sold a house for more than I expected.  I turned down the first offer because it was slightly less than what I wanted in price.  I could care less about a bidding war. 

2 weeks later I ended up with an offer that was slightly more that I was expecting as a reasonable selling price so I sold it without countering.

ETA:  I than walked away from a house that I saw on the first day it was listed.  I offered the buyer balked did not counter because they wanted a bidding war.  I felt I offered a fair price but was willing to negotiate to full asking.  I walked away.  The house sold 2-3 months later for $10,000 less than I offered.
« Last Edit: February 28, 2018, 05:58:41 PM by neverrun »

MissNancyPryor

  • Pencil Stache
  • ****
  • Posts: 527
  • Age: 50
  • Location: Northwest USA
  • The Stewardess is Flying the Plane!
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #30 on: February 28, 2018, 08:49:45 PM »
I have always heard this analysis:  if you would not pay the same amount to keep something as what is being offered by the buyer, then you should sell the item at that number. 

If you don't sell it for that price you are essentially buying it again at that price to keep it.

So, if you 'buy' it mentally because you think you can sell it for more in a bidding war (and is it worth the gamble to see) then go that way. 

I always have to noodle on that when selling something and it does help.  Would I want that thing back at that price myself?       

Undecided

  • Handlebar Stache
  • *****
  • Posts: 1084
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #31 on: February 28, 2018, 09:16:59 PM »
I have always heard this analysis:  if you would not pay the same amount to keep something as what is being offered by the buyer, then you should sell the item at that number. 

If you don't sell it for that price you are essentially buying it again at that price to keep it.

So, if you 'buy' it mentally because you think you can sell it for more in a bidding war (and is it worth the gamble to see) then go that way. 

I always have to noodle on that when selling something and it does help.  Would I want that thing back at that price myself?       

That makes sense when considering a solitary offer in the absence of a strong expectation of other offers, but it doesn’t make sense as an absolute rule. The OP can judge likely interest in the house. That a “full price” offer came in on day 1 is a factor I’d consider, along with the Zillow views, the agent’s reaction (but noting their different interests), and whatever else I could observe. I have bought a house with a high-pressure offer, and I have sold a house after refusing a high-pressure offer (getting multiple offers on my scheduled “offer day,” which I realize isn’t how it works in every market). The latter certainly worked to my advantage, and I’m very confident the former did as well.

sol

  • Walrus Stache
  • *******
  • Posts: 8492
  • Age: 42
  • Location: Pacific Northwest
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #32 on: March 01, 2018, 12:01:14 AM »
I have always heard this analysis:  if you would not pay the same amount to keep something as what is being offered by the buyer, then you should sell the item at that number. 

If you don't sell it for that price you are essentially buying it again at that price to keep it.

So, if you 'buy' it mentally because you think you can sell it for more in a bidding war (and is it worth the gamble to see) then go that way. 

I always have to noodle on that when selling something and it does help.  Would I want that thing back at that price myself?       

That makes sense when considering a solitary offer in the absence of a strong expectation of other offers, but it doesn’t make sense as an absolute rule. The OP can judge likely interest in the house. That a “full price” offer came in on day 1 is a factor I’d consider, along with the Zillow views, the agent’s reaction (but noting their different interests), and whatever else I could observe. I have bought a house with a high-pressure offer, and I have sold a house after refusing a high-pressure offer (getting multiple offers on my scheduled “offer day,” which I realize isn’t how it works in every market). The latter certainly worked to my advantage, and I’m very confident the former did as well.

It's also a silly rule for things that can be resold.  I wouldn't pay $100 to own a vitamix, but I know lots of you schmoes would buy one from me for $600.  So I would absolutely buy ten of them for $100, even though I don't want them at all, because I can turn a profit of $500 each.

Your personal valuation of an object has absolutely no bearing whatsoever on your selling price.

boarder42

  • Walrus Stache
  • *******
  • Posts: 7849
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #33 on: March 01, 2018, 07:07:29 AM »
@Case how are the other offers looking?

Capt j-rod

  • Bristles
  • ***
  • Posts: 339
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #34 on: March 01, 2018, 08:18:09 AM »
I own 6 houses. I hate games. I respect that it is just listed and offers are pouring in. If the buyer is qualified and has the down payment and credit to purchase the property then sell the damn house at a full asking price. If there are strings and contingencies then keep looking for a real buyer. I sold a property last year. I fixed it up and prepared it for market. I paid $150 for an inspection, corrected all the items that they found, had the inspection updated (free from the same company), included the document with the disclosure, and listed the house with a realtor. Lots of people wanted the house but only a few had the actual resources to BUY the house. I accepted a solid offer, lower than two of the other offers, and sold the house. When I buy a house and people start playing games I submit a number and let it stand for 30 days. No more no less. If they start playing games, I simply stick to the offer. Sometimes I lose out but I usually get the house. I live in a LCOL area in Ohio. These bidding wars work in HCOL area where buyers are trying to secure a home. I watch them try it here and it doesn't seem to work. If the number is higher than the appraisal then the bank won't lend the money. It really is that simple.

FINate

  • Handlebar Stache
  • *****
  • Posts: 1371
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #35 on: March 01, 2018, 08:59:31 AM »
I own 6 houses. I hate games. I respect that it is just listed and offers are pouring in. If the buyer is qualified and has the down payment and credit to purchase the property then sell the damn house at a full asking price. If there are strings and contingencies then keep looking for a real buyer. I sold a property last year. I fixed it up and prepared it for market. I paid $150 for an inspection, corrected all the items that they found, had the inspection updated (free from the same company), included the document with the disclosure, and listed the house with a realtor. Lots of people wanted the house but only a few had the actual resources to BUY the house. I accepted a solid offer, lower than two of the other offers, and sold the house. When I buy a house and people start playing games I submit a number and let it stand for 30 days. No more no less. If they start playing games, I simply stick to the offer. Sometimes I lose out but I usually get the house. I live in a LCOL area in Ohio. These bidding wars work in HCOL area where buyers are trying to secure a home. I watch them try it here and it doesn't seem to work. If the number is higher than the appraisal then the bank won't lend the money. It really is that simple.

The bidding wars we hear about in HCOL areas (e.g. SF Bay Area) only work because of extreme competition among buyers. An exceptionally strong seller's market with very low inventory being chased by many buyers. In these conditions a quasi-auction where the seller lists a little lower and buyers bid each other up make sense because relatively few houses are hitting the market and prices are rising, so it's difficult to value homes. Bidding wars don't happen in a buyer's market, even in HCOL areas.

boarder42

  • Walrus Stache
  • *******
  • Posts: 7849
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #36 on: March 01, 2018, 09:05:22 AM »
I own 6 houses. I hate games. I respect that it is just listed and offers are pouring in. If the buyer is qualified and has the down payment and credit to purchase the property then sell the damn house at a full asking price. If there are strings and contingencies then keep looking for a real buyer. I sold a property last year. I fixed it up and prepared it for market. I paid $150 for an inspection, corrected all the items that they found, had the inspection updated (free from the same company), included the document with the disclosure, and listed the house with a realtor. Lots of people wanted the house but only a few had the actual resources to BUY the house. I accepted a solid offer, lower than two of the other offers, and sold the house. When I buy a house and people start playing games I submit a number and let it stand for 30 days. No more no less. If they start playing games, I simply stick to the offer. Sometimes I lose out but I usually get the house. I live in a LCOL area in Ohio. These bidding wars work in HCOL area where buyers are trying to secure a home. I watch them try it here and it doesn't seem to work. If the number is higher than the appraisal then the bank won't lend the money. It really is that simple.

congrats on owning 6 houses and not enjoying games i see nothing wrong with what the OP is doing - maximizing his return here in a hot market for something he owns is capitalism at its finest.  Its clear you're not a fan of it but it doesnt make what the OP is doing incorrect

Case

  • Pencil Stache
  • ****
  • Posts: 755
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #37 on: March 01, 2018, 10:03:07 AM »
I own 6 houses. I hate games. I respect that it is just listed and offers are pouring in. If the buyer is qualified and has the down payment and credit to purchase the property then sell the damn house at a full asking price. If there are strings and contingencies then keep looking for a real buyer. I sold a property last year. I fixed it up and prepared it for market. I paid $150 for an inspection, corrected all the items that they found, had the inspection updated (free from the same company), included the document with the disclosure, and listed the house with a realtor. Lots of people wanted the house but only a few had the actual resources to BUY the house. I accepted a solid offer, lower than two of the other offers, and sold the house. When I buy a house and people start playing games I submit a number and let it stand for 30 days. No more no less. If they start playing games, I simply stick to the offer. Sometimes I lose out but I usually get the house. I live in a LCOL area in Ohio. These bidding wars work in HCOL area where buyers are trying to secure a home. I watch them try it here and it doesn't seem to work. If the number is higher than the appraisal then the bank won't lend the money. It really is that simple.

congrats on owning 6 houses and not enjoying games i see nothing wrong with what the OP is doing - maximizing his return here in a hot market for something he owns is capitalism at its finest.  Its clear you're not a fan of it but it doesnt make what the OP is doing incorrect

This is the correct response I believe.  It's funny to see the emotions that come to the table in some of the MMM forum threads.  I think we all need to remember to zoom out and reassess.

If you own 6+ houses and are flipping, selling, etc...  sure, you don't want to get involved with bidding wars, etc...  It's not worth your time and/or emotional investment (or maybe it is; there is a shit ton of money at the table sometimes).  But just because you feel that way, doesn't mean it's the best or logical choice for everybody.  For most people, making some well timed precise moves in terms of marketing, negotiations, etc... can result in major success.  This is roughly what I tried to do.  I tried to make a few smart moves in order ot optimize the $$$ I would get back, while not pissing off buyers too much or risking things too much.  It's all a grey area of course, but I think I took reasonable risks.  Some people commented about how I shouldn't jerk around the buyer, or do things that are mean, etc...  To quote the Dude, "that's just like your opinion, man".  But also, it's wrong, and it's assuming that your either playing nice or you're an asshole.  In reality, there is an in between area where you can both be nice/reasonable/respectful and also optimize your profit.

We got two solid offers (good financing), with the original coming back slightly higher.  They both used escalation clauses (we raise our price by X if some else outbids us, and our cut off point is Y).  The original buyers would have gone as high as 10k higher than their asking price, but it only went up 1.5K because the second buyer didn't go that high.  Was it worth the extra work?  Yes; this also occured in slightly more than 1 day.  Was it worth the hastle/stress?  Yes, because it was a good life lesson (first time seller).  Was it worth the risk?  Yes.  Sure, there was a slight chance it could have gone to shit, but the first buyer was VERY interested, and we were aware.  They weren't going to walk.  There was also a chance we could have made much more than we did... but we didn't happen to get a counter offer that drove the price up enough.  In theory we could hav eproceeded with the open house and tried to get more offers, but we have reached our limit of how involved we want to get for now (a lot of backstory I haven't described).  This also might begin to piss people off or scare people.  All a subtle balancing game.

We aren't out of this yet; still have to get through their inspection and the appraisals and see if that raises any hell.  But, both offers were well financed and so I think we are likely to succeed.

One poster mentioned that I shouldn't not sell the house at a price I wouldn't want to buy it at, or something like that.  As other responders have indicated, that is totally wrong.  There is not a direct correlation between what you will pay and what people will pay.  Lots of speculation here on something that is quite complicated.  On a side note, I totally would pay my asking price for this house.  I would pay more... like 10k more probably.  It is an unbelievably good deal.  The house is a mid-century modern wonder... totally in vogue now, but undervalued in my current conservative town (read: older RE agents undervalue then, while young people love them).

boarder42

  • Walrus Stache
  • *******
  • Posts: 7849
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #38 on: March 01, 2018, 10:15:01 AM »
thats awesome news - good work - 1500 is 1500.  sounds like it was actually a bit more than 1500

and yes the what you would buy it for is what you should sell it for is dumb even in housing.  I bought my house when the market for it was low - its probably worth 20-25% more than what i paid in 2016 - now should i sell it for what i'd pay for it - no i should sell it for the market value. 

sol

  • Walrus Stache
  • *******
  • Posts: 8492
  • Age: 42
  • Location: Pacific Northwest
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #39 on: March 01, 2018, 10:26:25 AM »
I live in a hot market.   Not only are bidding wars normal and expected, some agents will suggest deliberately underpricing when you list in order to draw the biggest possible audience of eyeballs.  They know the house will sell for more than list price, it's just a matter of how much more.

Remember that a seller is not looking for fair market value.  You don't want average.  You want to find that one person out of thousands who will pay more than everyone else, because they are in love with the architecture or the rose bushes, or their sister lives down the block, or it's the same floorplan they grew up with.  You're looking for the most irrational investor, the biggest chump with the strongest emotional attachment to the place.

So the sales plan is to get it in front of as many people as possible, to try to hook that one fish.  Comps don't matter.  Average market value doesn't matter.  If the house is unique in some way, someone out there is willing to pay more than everyone else.  Go find that person.

I lost out on several houses that were asking too much, but eventually sold to someone who overpaid.  And I have overpaid for houses.  In hot markets where lots of rich people are competing for limited supply, prices routinely do crazy things.  Zillow thinks my houses in the Seattle area market have been appreciating at 10-15% per year since the market bottomed in 2012.  With gains like that, the price should rise by thousands of dollars in the time it takes for the deal to close.

FINate

  • Handlebar Stache
  • *****
  • Posts: 1371
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #40 on: March 01, 2018, 10:27:10 AM »
I have always heard this analysis:  if you would not pay the same amount to keep something as what is being offered by the buyer, then you should sell the item at that number. 

If you don't sell it for that price you are essentially buying it again at that price to keep it.

So, if you 'buy' it mentally because you think you can sell it for more in a bidding war (and is it worth the gamble to see) then go that way. 

I always have to noodle on that when selling something and it does help.  Would I want that thing back at that price myself?       

That makes sense when considering a solitary offer in the absence of a strong expectation of other offers, but it doesn’t make sense as an absolute rule. The OP can judge likely interest in the house. That a “full price” offer came in on day 1 is a factor I’d consider, along with the Zillow views, the agent’s reaction (but noting their different interests), and whatever else I could observe. I have bought a house with a high-pressure offer, and I have sold a house after refusing a high-pressure offer (getting multiple offers on my scheduled “offer day,” which I realize isn’t how it works in every market). The latter certainly worked to my advantage, and I’m very confident the former did as well.

It's also a silly rule for things that can be resold.  I wouldn't pay $100 to own a vitamix, but I know lots of you schmoes would buy one from me for $600.  So I would absolutely buy ten of them for $100, even though I don't want them at all, because I can turn a profit of $500 each.

Your personal valuation of an object has absolutely no bearing whatsoever on your selling price.

It's also just wrong from an economics POV. If the value of an item for sell is exactly equal for the seller and the buyer than there would be no transaction. The market only functions because of a value asymmetry where both parties derive value from the transaction.

An apple farmer is selling apples for $1 each. It's harvest season and he's up to his eyeballs in apples so any individual apple is worth less than $1 to him, probably around the amount it cost him to produce it (let's assume $0.75). The potential buyer, however, has zero apples, so for them the apple is worth more than $1, say $1.25. Both parties have an incentive to make the transaction, which produces $0.50 of economic value. Nothing wrong with playing around in that $0.50 range if you can. Now if a buyer interested in a single apple tries to negotiate a price the farmer will likely tell them to bugger off, not worth his time. However, a buyer interested in buying in bulk...that's a different story. RE transactions are more like bulk purchases because of the dollar amounts involved - it makes sense for both parties to put a little effort into getting the best deal. In a buyer's market this might mean low-ball offers and added contingencies. In a seller's market it might mean bidding wars or waiting a little longer for the highest offer.

Case

  • Pencil Stache
  • ****
  • Posts: 755
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #41 on: March 01, 2018, 10:28:55 AM »
thats awesome news - good work - 1500 is 1500.  sounds like it was actually a bit more than 1500

and yes the what you would buy it for is what you should sell it for is dumb even in housing.  I bought my house when the market for it was low - its probably worth 20-25% more than what i paid in 2016 - now should i sell it for what i'd pay for it - no i should sell it for the market value.

To that I would add, you should sell it for what you can get for it.  Market value is just a perception (though maybe I haven't worded that correctly; never took a formal econ course).  What you get is what people will pay.  Therefore, you should design your marketing in such a way so that you can find the person who will pay the post and make them pay as much as they are willing.

Having gone through this, in the future I would probably tinker the sale design even further... I probably could have gotten more than I did.  But I am content.  For one, I learned a lot.  For two, I am being relocated by my job.  The relocation company imposes certain deadlines and a variety of rules I had to follow.

I had one person I know tell me, "just take the asking offer; in the grand scheme of things, a few thousand wont make a difference, and the other risk is that you might lose the sale".  But the counter argument is that I had a lot of interest in the house, and so it's not like I was going to lose everything.

boarder42

  • Walrus Stache
  • *******
  • Posts: 7849
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #42 on: March 01, 2018, 10:34:34 AM »
Market value - in the case of a house is what someone is willing to pay for it or that was my intent with that statement... i'm sure in some econ world that term means something else but IMO the market value of any given thing being sold second hand is what you can get someone to pay you for it.

Slee_stack

  • Pencil Stache
  • ****
  • Posts: 854
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #43 on: March 01, 2018, 10:37:13 AM »
Since the OP posted for opinions, it probably wise to consider them whether they are what they wanted to hear or not.

The OP (and others and myself) do feel that house selling is indeed a 'game'....or at least has elements of one.

Games can just as easily be lost as won.


I was pretty stoked at getting the first offer and having things sail smoothly from there on.


However, the game isn't over until you walk out of a closing with a check (or wire transfer).

Its good to consider both the pros and cons against one's own risk tolerance in closing price.

Congrats to the Op on the $1500 paper win.  I do hope you realize it and don't get stuck in multiple contract hell.

Case

  • Pencil Stache
  • ****
  • Posts: 755
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #44 on: March 01, 2018, 04:29:50 PM »
Since the OP posted for opinions, it probably wise to consider them whether they are what they wanted to hear or not.

The OP (and others and myself) do feel that house selling is indeed a 'game'....or at least has elements of one.

Games can just as easily be lost as won.


I was pretty stoked at getting the first offer and having things sail smoothly from there on.


However, the game isn't over until you walk out of a closing with a check (or wire transfer).

Its good to consider both the pros and cons against one's own risk tolerance in closing price.

Congrats to the Op on the $1500 paper win.  I do hope you realize it and don't get stuck in multiple contract hell.

Im not too worried about it falling thru with the buyers... they are crazy in love with the house.

Im more worried about the collosal problems my company’s relo policies are causing... ugh, not worth getting into.

Case

  • Pencil Stache
  • ****
  • Posts: 755
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #45 on: March 19, 2018, 01:26:23 PM »
This is a follow up to my post from earlier today:

https://forum.mrmoneymustache.com/ask-a-mustachian/balancing-real-estate-agents-advice-versus-incentives/

Ok, so we listed the house today, immediately (like within 5 min) received a request to view it.  We showed it an hour or two later, and received a full price offer within an hour or two.  They are requesting we reply by 11:30 tomorrow morning.

We have another showing scheduled for tomorrow evening.  My agent thinks the first offer is usually the best but also thinks it makes sense to wait.  Zillow is going in insane with views.  The first buyer is probably scared of a bidding war.... we want a bidding war!

I know there isn't much detail, but what do you think?  Take it?  Wait for more?  With that much interest lined up, I'd think it would make sense to wait for more, though we also want this to finish up fast.  We have an open house scheduled for Sunday. I don't know if we can wait that long... then again, we can wait as long as we like!  I guess i don't know how long people wait (after making an offer) before they get pissed and walk.

Meanwhile, we're doing this through a relocation company.  I don't believe we are actually able to accept by tomorrow because we have to wait for inspection results to come in.

I can't share details on my house, but I wish I could.  I am ultra sad to sell it.  It is a dream house, which is only affordable because it is in a low COL area, where this certain style of house flourished in the 50s.  It is in fabulous shape... it is a wonderful deal.  In a high COL area, it would sell for 4x what we are listing for at least.

Stimulation overload!!!

So I wanted to bump this one time for a brief update/question:

Our seller's are totally ready to roll on the house.  They hired an inspector who was supposed to be the pickiest guy in town, but made no requests and offered to buy the house 'as is'.  They have offered to skip the appraisal.

This seems too good to be true.  Could something fishy be going on?

boarder42

  • Walrus Stache
  • *******
  • Posts: 7849
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #46 on: March 19, 2018, 01:56:03 PM »
i assume they are all cash buyers if they are skipping the appraisal - as long as they are paying you in cash i dont think anything fishy is going on.

Case

  • Pencil Stache
  • ****
  • Posts: 755
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #47 on: March 19, 2018, 02:16:20 PM »
i assume they are all cash buyers if they are skipping the appraisal - as long as they are paying you in cash i dont think anything fishy is going on.

They are not all cash, though are putting 20% down.  It's a small town, they work for the same company... I don't think it's suspicious on their end necessarily... just wondering why ....

boarder42

  • Walrus Stache
  • *******
  • Posts: 7849
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #48 on: March 19, 2018, 02:36:00 PM »
i assume they are all cash buyers if they are skipping the appraisal - as long as they are paying you in cash i dont think anything fishy is going on.

They are not all cash, though are putting 20% down.  It's a small town, they work for the same company... I don't think it's suspicious on their end necessarily... just wondering why ....

i dont know of many banks that will give you funds for a house without an appraisal - so i doubt they can make that happen.  they may just be saying even if it comes back low they'll make up the difference .

Rocket

  • 5 O'Clock Shadow
  • *
  • Posts: 99
  • Location: Los Angeles
Re: Post follow up: immediate full price offer!!!!!!!!
« Reply #49 on: March 19, 2018, 02:44:03 PM »
I sold my house in Los Angeles last Sept.  Very good sellers market.  House went into MLS on friday with an open house on Sunday.  We said we'd decide on any offers on tuesday.  Got two offers on monday over asking.  Took the lower offer because their financials were better.  Higher offer was from someone who was self employed and in the process of getting a divorce.  This would be his 3rd house. Financials on higher offer were all in soon to be X's name.  I foresaw a lot of problems with that offer.

The other issue with the higher offer was that they used my realtor to make their offer.  They offered a thousand dollars more, than the 1st offer because obviously my realtor told them what the other offer was.  His break to me was lowering his commission by 1%.  That kinda pissed me off because I wanted my agent to represent me and not the buyer.  So for two reason I took the offer that was about 10k less.