Author Topic: Counter offer to multiple offers- first time seller  (Read 6235 times)

Scientist

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Counter offer to multiple offers- first time seller
« on: July 15, 2014, 08:40:40 PM »
Hi ALL,

I  need help from you all on countering strategy for multiple offers on our property. The situation is that our unit has about 30K of upgrades compared to a unit that sold 2 weeks ago for X75K. A slightly larger unit about 75 sq ft. larger went for (x+1)25 K.

We listed at X68K, the agents told that such strategy will invite mupltiple offers.
The offers cursory look.

1. X68K by a doctor couple.
2. X80K, all cash.
3. Dont know yet will probably come in tomorrow morning. They know we have 2 offers above asking.

So although I am biased, I think ours should go for anywhere X95-X98K total both due to the prevailing market and also how good our unit is in general compared to the sold ones. How do we counter??? The agents tell us just counter all and ask for their best offers. That way maybe they will increase their offers above what we thought can happen. I am not so sure of this strategy. They may just go 2-3K above their offer and end at that. I an okay if it doesnt sell right now too; we could just rent it out when we move in the next 3 months. Since we have low interest rate and the forecast is that the price will increase slowly but steadily-5-6% per year. so we can afford to be a bit more aggressive? Can we go ahead and ask for X98K?? Is it wrong to put a number figure?

Thanks,

Freedom2016

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Re: Counter offer to multiple offers- first time seller
« Reply #1 on: July 15, 2014, 09:08:19 PM »
I would think your real estate agent has a lot of experience with this sort of thing... their advice would hold weight with me. What does s/he say about your idea of stating a number?

Frankly if I was the person who put the all cash offer 11k above asking on the table and then was asked to pony up another 18k, I'd withdraw my offer. It does smack of greed (IMO) and if you wanted 30k above your list price you should have priced higher to begin with.

For what it's worth, my in-laws' house is for sale and they received an offer above asking the first weekend on the market. Their agent advised them to take the money and run - not dick around trying to game a few more dollars out of a willing buyer.

Another Reader

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Re: Counter offer to multiple offers- first time seller
« Reply #2 on: July 15, 2014, 09:43:48 PM »
Pricing below market and starting a bidding war is a common strategy in the most desirable areas of the SF Bay Area, Los Angeles, and San Diego.  If you are in a similar area, that's probably the way to go.  Your agent calls the three parties and tells them to submit highest and best by tomorrow evening.  Anyone else that calls to place an offer is told there are three bidders and to submit highest and best by the same deadline.

Once you have all the offers in hand, you can review them for conditions.  Are they cash or financed?  Is the buyer waiving the appraisal contingency?  Are any of the offers "as is?"  If none of the offers is what you want, counter the strongest offer with what you want and tell the others you are doing that, but if negotiations fail, you will reopen the listing for offers.

Unless the buyers all think the listing is overpriced and no one will bid higher, they will likely up the ante if they really like your unit.

No one really knows what will happen to real estate prices in the next few years.  If you can put the equity to better use in your new home or in some other investment, sell and be done with it.

SDREMNGR

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Re: Counter offer to multiple offers- first time seller
« Reply #3 on: July 15, 2014, 11:15:16 PM »
If you wanted 98k, you shouldn't have listed it for 68k.  You can counter at 98 but I don't think you will have takers.  You may have spent 30k on improvements but that doesn't mean that your property value went up by 30k.  Your best bet may be to counter all offers and say that you are accepting offers above 80k only.

Scientist

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Re: Counter offer to multiple offers- first time seller
« Reply #4 on: July 16, 2014, 12:25:57 AM »
Update: Got the third offer that is what we were expecting X95K with an escalation clause......still figuring it out. Will probably counter all three to come up with best and then be done with it. Our listing is 7 days old. Thats how the market is right now- not being greedy, I know the value of our unit. Location, location, location........:)
« Last Edit: July 16, 2014, 12:30:24 AM by Scientist »

Scientist

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Re: Counter offer to multiple offers- first time seller
« Reply #5 on: July 16, 2014, 12:36:45 AM »
Pricing below market and starting a bidding war is a common strategy in the most desirable areas of the SF Bay Area, Los Angeles, and San Diego.  If you are in a similar area, that's probably the way to go.  Your agent calls the three parties and tells them to submit highest and best by tomorrow evening.  Anyone else that calls to place an offer is told there are three bidders and to submit highest and best by the same deadline.

Once you have all the offers in hand, you can review them for conditions.  Are they cash or financed?  Is the buyer waiving the appraisal contingency?  Are any of the offers "as is?"  If none of the offers is what you want, counter the strongest offer with what you want and tell the others you are doing that, but if negotiations fail, you will reopen the listing for offers.

Unless the buyers all think the listing is overpriced and no one will bid higher, they will likely up the ante if they really like your unit.

No one really knows what will happen to real estate prices in the next few years.  If you can put the equity to better use in your new home or in some other investment, sell and be done with it.

Thanks for your input. We will probably go with what our experienced agent says. Thanks for your reply.

SDREMNGR

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Re: Counter offer to multiple offers- first time seller
« Reply #6 on: July 16, 2014, 08:02:26 AM »
Congrats.  But also remember that an offer is just a piece of paper.  Have the realtor vet the offers to see who is the real deal and who is just playing investor. 

Latito

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Re: Counter offer to multiple offers- first time seller
« Reply #7 on: July 17, 2014, 12:18:11 PM »
Keep in mind that your realtor is financially incentivized to get this deal done sooner rather than at the highest possible price.  Say you could get another 10k out of the property.  For you that represents probably between $9000 and 9500 in additional profit.  When factoring in any possible mortgage you have on the house, the increase for you in terms of percentage gets even better.  For the agent that represents maybe $100 to 150 in their pocket after the buying agent and agency firms get their cut of commissions.  Why would they jeopardize their commission on the rest of the sale to get a small amount more.  Keep in mind that they would have to put in more hours and possible spend more on marketing, just to squeeze the last few dollars out of your deal.  It just isn't worth it to them when they can sell fast and move on to the next house.  For them its better to get 90-95% of the max possible on several deals than 100% of a few.  Priorities obviously flip for you.


As for listing well below expected price in an attempt to create a bidding war - I personally hate the practise but I understand that it works and as a seller you have to have your own interests in mind.  Good luck!

Scientist

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Re: Counter offer to multiple offers- first time seller
« Reply #8 on: July 17, 2014, 01:26:55 PM »
We asked all three offers to come back strongest and final and gave them 48 on advice of our agent.
So, we got one offer back-all cash so no dealing with appraisal contingency. But they have given us time only until 5PM today. The other two offers have not come back yet. Our agent is asking us to accept this now and not wait for the other two.The cash offer from an investor now is substantially higher than the X95K offer. So we are inclined to accept it. I somehow feel bad for the other two and also that we are making the decision without looking at the other two.   Even if they come back higher they will still have to go to bank for loans so not sure how that route will play out. Looks like we will accept the cash one although the other two wanted to live in the condo and were more emotionally involved with the deal.
Your opinions?

Cpa Cat

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Re: Counter offer to multiple offers- first time seller
« Reply #9 on: July 17, 2014, 01:32:55 PM »
Tell the other two that you will be accepting this offer at 5pm and that they can submit an offer before then.

But I'd take the cash offer. It's what you want and it's cash. No BS.

Latito

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Re: Counter offer to multiple offers- first time seller
« Reply #10 on: July 18, 2014, 02:02:58 PM »
As much as it would be nice to let your emotions triumph, at the end of the day the cash offer is almost certainly the best option for you and that is what has to take priority here.  Agreed on giving the other 2 parties until 4:55 and then accepting the cash offer last minute if the others can't beat it.

TheHouseStache

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Re: Counter offer to multiple offers- first time seller
« Reply #11 on: July 19, 2014, 06:37:40 AM »
We asked all three offers to come back strongest and final and gave them 48 on advice of our agent.
So, we got one offer back-all cash so no dealing with appraisal contingency. But they have given us time only until 5PM today. The other two offers have not come back yet. Our agent is asking us to accept this now and not wait for the other two.The cash offer from an investor now is substantially higher than the X95K offer. So we are inclined to accept it. I somehow feel bad for the other two and also that we are making the decision without looking at the other two.   Even if they come back higher they will still have to go to bank for loans so not sure how that route will play out. Looks like we will accept the cash one although the other two wanted to live in the condo and were more emotionally involved with the deal.
Your opinions?

Just because it's cash doesn't mean there's no appraisal contingency. Be careful with that. Also, be careful if you end up taking a similar or higher financed offer over this one for the same reason.

Blindsquirrel

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Re: Counter offer to multiple offers- first time seller
« Reply #12 on: July 19, 2014, 06:38:39 PM »
    Ask them all for their best and final offer by X time and date.

Scientist

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Re: Counter offer to multiple offers- first time seller
« Reply #13 on: July 20, 2014, 04:36:38 PM »
Hi All- Just an update:

The cash offer is the only strong offer. The strongest offer from the first round-X95 didnt even counter. Totally unexpected. The third countered but still way lower than the cash offer. So we signed with them. Physical inspection is 7 days. It was written that there is no appraisal contingency or loan contingency. Lets see how the inspection goes.

escolegrove

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Re: Counter offer to multiple offers- first time seller
« Reply #14 on: July 21, 2014, 10:02:35 PM »
Congratulations! That is great news.

arebelspy

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Re: Counter offer to multiple offers- first time seller
« Reply #15 on: August 12, 2014, 09:42:27 PM »
Congrats on getting what you were hoping for!

Did the due diligence period/inspection go okay?
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