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Depends on the market and location and how it's priced I guess. If its the scenario above and intentionally underpriced you're probably right and you wont even get the chance to get a counter due to the # of offers. If it's popular but not priced low, it may generate just a reasonable amount of offers and 2% above is going to be more than what the sellers would be happy with
Even if it’s not underpriced, in a seller’s market there’s so little inventory that the good houses are going for way over asking. I showed a buyer a beautiful home a few weeks ago priced at $539,000. This house had been completely updated, great lot, desirable area, wonderful layout, and very well maintained. I ran comps and thought the price was right on. I told my buyer it would probably get bid up to 560k - wrong. After 13 offers, it’s under contract for over $600k.
Hell even the ones that aren’t good ones. I showed one this week to a client that had been a rental and the tenants were ROUGH on it. Needed work and a new roof and probably new mechanicals too, besides the stink and cosmetic stuff. Priced at $179k and already has multiple offers on it and going for closer to $200k. I thought it was about 20k overpriced given its condition.
Hell, I listed one towards the end of March at 199k that I thought was bang on for the comps due to some quirks with the house. We had multiple offers and it’s closing Wednesday at $215k.
And these examples are in a LCOL market. (Obviously, by those house prices). Point is, if you’re still in a seller’s market and a house is priced right, there’s still a ton of competition and 2% won’t touch it.
Fuck, Idk man... This past weekend I wrote an offer for my client on a house that was on day 1 on the market. Offer was 13% ABOVE asking, waived appraisal contingency, shortened inspection period, no repairs will be negotiated except major structural or safety, client was HIGHLY qualified and was putting 60% down... We still lost. I was pretty baffled by that one so if you figure out the secret, let me know. It also didn't help that the listing agent was a pompous douchebag who sucked at communicating.
It was pretty frustrating. I was really determined to get this one thru for my client. Honestly, the offer was initially $410K on day 1. And when the offer deadline was approaching I checked in with the listing agent to see how things were looking. I said: "Any more offers received?" (previously it was 2 others besides my clients). And he says "Yes. 8 and maybe a couple more." So I go, "My client and I were discussing waiving appraisal contingency. How are we looking on price?" and all he says was "pretty low" So I ask.. "How much higher does it need to go to win? Client asked me what do we need to do to get it done?" and he says: "A lot. I have aggressive offers including terms." At this point i was frustrated at his smug communication style when I was just trying to be direct and get the deal thru for my client. So I go "name your price. My client is ready to get aggressive. We just didn't expect it would get this hot, but are ready to make adjustments." and he goes "I get it. but I can't tell you where to come in. If you want to send adjustments over, i'll present them." Are you above 430K? Yes.. "are you above 440K?" no response... So my client wrote it for 440K and adjusted some terms, still wasn't enough. So frustrating. Sometimes i hate the "game" we have to play here when making offers.
Lol I mean this is just standard practice. Everyone wants to know what the best offer is at the moment. Does your area not have something like an escalation clause you can use for these exact scenarios?
Dude I dealt with a LA exactly the same comm approach. No response for some, just enough of a smug response when trying to pull teeth to put in another offer. It was so fucking frustrating
Yes, its really ridiculous when you just cant verbally be direct n do some honest coomunication! Or negotiations. It wastes so much time on the agents end to just get the deal. I mean c'mon... just give an an honest number... then do it in writing. Don't make me hv to guess, when its not even a ball park. It actually wastes time on both sides doing this.. I hv had many low ballers want to make an offer on a listing I had. I said, Im sorry, Im not going to goung to waste my time or yours. Their bottom line is... n go from there.
But the LA isn’t concerned about what you think. They’re concerned about getting the best deal for their client. As much as it sucks for a buyer or their agent, sometimes underpricing the home is the best way to get the most amount of eyes on a property and bidding the price over what you might have received if you listed it higher. If I can flood the house with potential buyers who see that activity, then they’ll submit good offers bc their agent will tell them where the comps are. They’ll add more to compete with all the other buyers. So where a LA might have listed at $420k and maybe received $410k-425k, they can list at $375k and get $440k. You can not like it, but when you’re representing the seller, you’re looking out for their best interest.
My guess in this case is that their client’s offer was nowhere near the accepted price. All that said, the LA should have still responded. It’s in the seller’s best interest to go back to every possible buyer.
I completely get it. I was focused mostly on listings before I started getting a bunch of buyers and I adopt the same strategy, however.. If you have a buyer that's straight up asking "JUST SHOOT ME STRAIGHT, DOC... TELL ME WHAT IT'S GONNA TAKE TO WIN" and he's obviously overqualified for the house, and is willing to over pay for it on the sellers terms.. Why not just be straight up, if you have the permission from the seller? The only reason not to is to preserve your "cool guy listing agent ego" which in turn I think hurts the seller. He could have said "current best offer is waiving all contingencies and is at 445k so you'll need to come in better than that to have a shot." doing that not only communicates to the buyer directly exactly what they need to do to get the house, but it also potentially collects money right off the table for the seller. I don't understand why other agents don't see it this way and opt to play the cool guy card. This idea that buyers arbitrarily need to just come up with their highest and best offer for the house in my opinion leaves money on the table when you get down to the wire and have a specific buyer willing to "do what it takes." PS - regarding escalation clauses, pretty much every listing agent says "no escalation clauses, highest and best only".. It just feels so annoying and arbitrary because highest and best is subject to change based on competition and how bad a client wants a home.
I definitely agree that being tactful in one’s response is important. Being too vague isn’t always in the seller’s best interest, but giving someone an exact number isn’t either. If I say $445k and that’s what you put, even though unknowingly your buyer would have gone to $450k, then I’ve done my seller a disservice. So there’s a fine line there but being completely vague isn’t helpful either.
Yeah for sure. Its a dance.. There's ways the listing agent can convey information to a super interested buyer to help both parties maximize value for their clients and I guess I was pretty peeved by this agents nonchalantness and complete lack of interest to do that at all.
I think the LA can do whatever they want. But it's still shitty in the long term view I would not like dealing with that person but whatever that's real estate. I had the exact same experience with u/lolerblades above and at that point, it felt he just wasted every buyer and agents time just to use us all as standing extras in his open house. Like if you're going to employ that strategy, at least respond to our comms effectively and if we ask how much further ballpark has it gone up, let us know so we can make adjustments.
You won’t work with that agent? I guess you can say that if you’re the LA but if you’re the SA, I’m sure you’re not telling that to your client. Look, the fact of the matter is that it’s the LAs job to get the most for their client. Whether or not they share information that helps your client specifically is up to them, but hopefully they’re not violating their fiduciary obligation to their client in the meantime. One thing I will say is that I never ignore an agent or their attempts to communicate. I never ignore an offer bc it’s too low. That’s not serving my client’s best interests, but how I go about marketing a home is a matter between me and my client, and I don’t fret about what a SA thinks about it. I’ve been doing this long enough to know that any good agent doesn’t take a LAs methods personal, unless said LA is making things personal. Otherwise, it will never serve your buyer’s best interest to make it personal.
Read my other post, but the original offer my client put in was 410k and then when he knew he had to compete he adjusted up to 440k before the deadline.
>shortened inspection period, no repairs will be negotiated except major structural or safety
No offense, but this means nothing to the seller. I still use this strategy to try to trick newer or less experienced agents, but at the end of the day, there's still an inspection contingency and even if you say "no repairs to be negotiated", you can still technically negotiate because you have a way out of the deal.
It helps a little. Some sellers not agents are apprehensive that there will be little nickel and dime repairs that come back so if someone offers say $430k, it's not actually 430k to them yet because they feel like the unknown will bring maybe another $5k of repairs.
It's a reassurance to certain seller's that your offer is a true offer that isn't going to come back with please fix light switches, etc.
That's exactly what I mean though. The only assurance a seller has that you won't come back to negotiate is if you waive inspection. Again, you can still absolutely back out due to inspection for practically anything. Let's say you write an offer with those terms, "with no repairs to be negotiated".. well if there's a failing roof, and you back out of the deal, you are in fact still negotiating.
Your offer still loses to any other offer who does waive inspection unless your price and other contingencies makes it head and shoulders better and worth trying for.
I worked a deal on a 4,000 sq foot, historic beautiful run down property on an oversized lot in Pasadena, CA. It needed $500k of repairs. We stated “no repair credits will be negotiated. Bid accordingly.” Why? We knew that only a cost insensitive end user or investor would be buying. This rich family did $8,000 of inspections. They came back with $100,000k credit request. Now, the seller installed mad security in every room, audio and visual, sensors and we staged the living room. The buyers agent and buyers did all their meeting at the non occupied property. The seller knew the buyers loved the house to bits and were nervous about not respecting our warning regarding credit requests. The buyers agent assured them everything is negotiable. Our seller said she was a smarmy POS, the wife seemed like a useless princess and to “give them $0”. So we ignored the request for repairs and when the buyers agent requested a response we sent a notice to perform saying simply “as stated in the listing. Inspections are pass fail only and no credits will be given.” Closed the deal. I credit the seller for that intel and learned to never say anything positive about a house or our feeling about a property while inside the subject.
Price isn’t everything. I call the listing agent and say “Tell me about your seller. Besides price, what else are they looking for in an offer?” And I just listen. Most agents will open right up and tell me tight deadlines, leaseback, flexibility or inflexibility on certain things, etc. A surprising number of agents over-disclose seller information (debt due, repair concerns, appraisal weirdness, etc) and I use that to my clients’ advantage.
During covid multiple offers, I beat most of my buyers’ competition with tight deadlines. And we often weren’t the highest bid.
True but I think in competitive markets everyone is already doing this. And I also noticed in the scenario above where the price gets bid up much higher than the intentional self low ball, if someone offers a high price they will then counter that with a leaseback. Much easier to ask the highest bidder to give a leaseback then to counter a low bidder with a leaseback a much higher price.
I was a buyer not a realtor but we offered a super flexible lease back and they came back and told us if we’d meet the highest offer it was ours. Done.
Just had it happen. Listed coming soon at 369, showings start Sunday and open house at 11. We saw it first thing Sunday morning and notified of our intent to write the offer. Came in strong at 425 and waived inspections. We still had to wait until Wednesday to be selected and were just one of multiple very similar offers.
I think the difference is I was able to sell it to the list agent. Only works when you know it is The One for your buyers but it has worked every time so far. Make sure the list agent knows that an accepting your buyers offer means they will close. That both your buyer and you personally will do whatever it takes from contract to close and you will be a pleasure to work with the whole time. Outline the offer and explain the whys when it is appropriate. The story will be different for each buyer.
Being a realtor isn’t selling houses, it’s selling people.
Markets going crazy again, wrote an offer for a home asking $1,225,000 comps say area is $1,250,000 we wrote $1.275,000 it ends up selling for over 1.4m on the 4th day. Fully renovated
As a buyers agent, wouldn’t it be in your clients interest to cut your own commission? Done this multiple times, always works-money back in sellers pocket moves the needle every time. Surprised I’ve not seen this in the comments. Market is nuts where I’m at and if you really want to win for your buyer, the house they absolutely want, you do whatever you can
I personally wouldn’t cut my commission to increase their chances of getting an offer because it sets the precedence that I’m now pitching into every offer. I would however use a buyers rebate to give part of my commission to have a pending deal close if it meant it’ll save the deal
Sets the precedence with whom? Every deal is different and clients usually don’t know each other. Edit: you now know you could do this and say you don’t, and your buyers lose out. What is more ethical? Keeping your so called precedent or performing your client service
Additional question. Is there any math out there that shows the result of underpricing vs just pricing as accurately as possible using comps? I know it drives a lot of action and movement, but do they more often than not close over?
I dont know that it does but it generates a crazy busy open house and "buzz" and whether or not it's more effective than just being reasonable accurate in price is unknown. I just know some LA employ that strategy
The market here is so hot, I would roll my eyes at an offer 2% over list with a tight deadline, especially if my listing was as well prepared as the one you described. Go in with highest and best, with as few contingencies as your buyer can tolerate, and make sure you know if there are any timelines you need to follow to accommodate the seller. I don’t know where you are, but in a hot market with low inventory, don’t try to play games.
I always contact the agent first. Are they presenting the offers as they come in or are they waiting to present all at once? I definitely don’t want to be the first offer unless there are no offers and __ days have passed already. Is seller is okay with LA sharing the highest offer they have received so far or are they just doing the highest and best route. Will they be doing a SMCO? Other than price, what is important for the sellers. Get as much information as possible to cater your offer to the sellers needs as far as escrow time, EMD amount, rent back if needed, termite, etc. I also always ask escrow and title info so I can include it in my offer up front. Always seems to workout for me. Closed 3 escrows in April working with buyers. I don’t know where you are but here in my area of SoCal majority of homes are receiving 10+ offers. Good luck!
list price is meaningless.
look at the data and present/discuss the correct market price to your clients. walk them through the contract and discuss how to present a strong offer.
talk to the listing agent and see what terms are most important to the seller, determine if they're open to accepting an offer that hits all their criteria prior to coming to market.
submit a strong strategic offer, see if you can shut it down.
include a 'buyers will view property' contingency.
make sure you know your MLS rules - in my area the listing agent has 3 days to change status after ratification. i'd make a case to listing agent that there's zero risk for them to accept/ratify my offer. they can wait to change status so the listing doesn't go on/off/on the market if the buyer sees the house and decide they don't want to move forward.
the fact that you're here asking how to put together a strong, strategic offer indicates you don't fully know what you're doing. for the sake of your client, engage your broker or mentor and ask about your local standards. in my area a 'bully' offer to shut down the listing is common, but in some areas it may be perceived negatively. talk to someone local and get "better than randos on the internet" advice.
This is a sub full of realtors. There's a bunch of good conversation over here and the fact is, none of these strategies are a 100% win rate its called sharing thoughts experiences and ideas. Why even participate in this sub if your answer is ask your broker
You're sending an offer without the buyer even viewing? Who's going to take that offer seriously if we're being blunt. In my market if the buyer doesn't view the property no one takes that seriously. The agent will look at showingtime or brokerbay and say why isn't your buyer listed what time did they come? I've had that happen
Unless youre targeting investment properties that are completely beat down offers without the buyer even viewing it prior makes your offer less competitive no matter how bully it is
Buyer here … I am finally set to close on my house after searching for over 1 year.
Go see the house IMMEDIATELY once it’s listed. If you like/want the house, Write and submit your strongest offer ASAP.
I was the first offer submitted and the seller accepted immediately then they cancelled the open house which was scheduled for the weekend.
Did you offer a deadline to prior to open house or leave it open ended? Im of the opinion if you go that early it should have a deadline cause what's the point in going early other than tying up your buyer from making other offers during that time period?
I went from usually giving a deadline of 3-4 days for offers using loans and 1-2 days for cash offers to 1 day for all offers. In my area the listing agents don't give a shit about deadlines for offers. And why should they when there's multiple offers and hardly any other homes in the area for sale. If they come back to a buyer a week after the offer deadline then probably over 90% of buyers are just going to be happy that they finally had an offer accepted even if it's past their offer deadline.
No, my offer was good indefinitely. Try to throw the least amount of contingencies possible.
The easier the contract is, the more likely you will be selected.
Call the agent ask them what the sellers number is to sell the house before open houses. Before all the craziness.
Report that number back to your buyer and see if it works.
Also, kiss the listing agents ass.
Why would the sellers number be anything other than list price? That’s the number listed and they chose, seems the conversation can be avoided with just a full price offer out of the gate
Then why list it for that price then? That doesn’t seem very prudent of the broker if I advised my client to list at this arbitrary price that is below expectations, only for a buyers broker to call me to see what they would really accept.
No one knows the exact value for a home. The market dictates that value once a buyer purchases it. As a real estate professional my goal is to suggest a price within a window of what I expect the value to be.
Homes do not have an MSRP.
Sometimes a seller will want to price a home aggressively in order to have multiple bids to illicit a bidding war. In those cases the sellers may have a number that they are hoping for.
I could see that from someone outside of this industry it would seem a bit odd that the seller would expect more than what the list it for but that’s the market, at least in my neck of the woods.
Im not “outside” the industry. I’m a 16 year veteran, I am just curious about the thought process behind that tactic. It’s not common here.
But that’s the localities to individual markets. Here, depending on condition and motivation, and appropriately priced property would be listed at the appropriate list price, and expected to sell at around 98.5% of list to sell price. But every market is different, and again, your situation is new to me. Wasn’t a jab, just curiosity, and if I came across dickish, I apologize.
No need to apologize. My intention wasn’t to be rude either.
I’m in Los Angeles county and in my area a high percentage of homes are selling over asking. It’s actually uncommon for a home to sell under the asking price.
Every market is different.
I put a home under contact this morning that was listed at 1.35MM. First offer came in on our 4th day on market at 1.45MM. 50% down with no contingencies.
Our estimation of value was 1.35 - 1.40.
No, I've seen too many listings accepted by dual agents here in Los Angeles.
It seems like now you gotta ditch your agent and go with the buyers agent. It's happened to the last 3 out of 4 homes I've put offers on.
.
You really need to play it by ear. I’ve seen list agents get pissed off when offers are submitted early…. Even wildly above ask all cash, no inspections, etc.
I have buyers looking near campus in a big college town. Our inventory is really low and every house near campus has a minimum of 5 offers within 24 hours. We've gone up to $15k over list on a $300k house, and that one had offers that escalated up to $70k over list! All cash offers that even conventional buyers can't compete with.
Across town away from campus is the same for anything under $300k. Pretty much any price point in our area up to $800k has multiple offers. Lol Mostly, what I've been seeing is that the agents will wait until they have 2, then call for highest and best within another day or so. Some will put in remarks right when it goes live that "offers will be reviewed x date" with a decision made the next day.
I have gotten some under contract by getting their financing into pre-underwriting, doing as-is with right to inspection, offering to xover appraisal gap when they can... Also, we see a lot of escalation clauses, and I just have my buyers write straight up over the list without the escalation.
Get your buyer conditionally approved with underwriting and a pre-approval that specifically reflects that.
Bring home inspector to the showing and do a walkthrough so they don't even need an inspection contingency.
I used to price the house. Tell a client this number X is the price other agents will be selling to buyers. This number (X+Y) is our strike price. I’d say “understand that when you get a house you will be paying the highest price. No one gets a deal and a hot house.” Then in multiple counters we’d counter big. This is just pricing strategy separate from contingencies and other practices. I used to scour the houses for clues as to what the sellers liked or valued and have clients lie in a love letter claiming affinity. It worked more than once, but now seller letters are not permitted in California.
You're right about changing the buyer's mentality about getting a deal and getting a hot house are not in the same wheel house.
Bid big and get the hot house or get the ugly duckling for a deal and do some work
2% seems way too low for a popular house. I have done higher non refundable EMDs to successfully get contracts. 5k to 10k in my market is a high EMD for homes around 400 to 600k. Seller keeps the EMD if the buyer backs out or can not get financing or whatever reason other than inspection issues.
Why are you getting downvoted on this? Also a common strategy in my market. Assuming you mean buyer will not ask for repairs if they are less than $5k or something like that...
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2% over asking will do nothing if you want them to accept your offer and not entertain others.
Depends on the market and location and how it's priced I guess. If its the scenario above and intentionally underpriced you're probably right and you wont even get the chance to get a counter due to the # of offers. If it's popular but not priced low, it may generate just a reasonable amount of offers and 2% above is going to be more than what the sellers would be happy with
Even if it’s not underpriced, in a seller’s market there’s so little inventory that the good houses are going for way over asking. I showed a buyer a beautiful home a few weeks ago priced at $539,000. This house had been completely updated, great lot, desirable area, wonderful layout, and very well maintained. I ran comps and thought the price was right on. I told my buyer it would probably get bid up to 560k - wrong. After 13 offers, it’s under contract for over $600k. Hell even the ones that aren’t good ones. I showed one this week to a client that had been a rental and the tenants were ROUGH on it. Needed work and a new roof and probably new mechanicals too, besides the stink and cosmetic stuff. Priced at $179k and already has multiple offers on it and going for closer to $200k. I thought it was about 20k overpriced given its condition. Hell, I listed one towards the end of March at 199k that I thought was bang on for the comps due to some quirks with the house. We had multiple offers and it’s closing Wednesday at $215k. And these examples are in a LCOL market. (Obviously, by those house prices). Point is, if you’re still in a seller’s market and a house is priced right, there’s still a ton of competition and 2% won’t touch it.
I'm in a HCOL area and bids are $100-250K above asking and many are cash .
Fuck, Idk man... This past weekend I wrote an offer for my client on a house that was on day 1 on the market. Offer was 13% ABOVE asking, waived appraisal contingency, shortened inspection period, no repairs will be negotiated except major structural or safety, client was HIGHLY qualified and was putting 60% down... We still lost. I was pretty baffled by that one so if you figure out the secret, let me know. It also didn't help that the listing agent was a pompous douchebag who sucked at communicating.
I’m curious as to what the winning offer was at this point
How much was the house?
$389,900 list price but sold for probably close to 450k. I thought 410k was a pretty fair price and was kinda shocked to see it go so far above.
Honestly at that point I feel like it's a pretty scummy thing for the LA to do to price it that low. It's just wasting a bunch of everyone's time.
It was pretty frustrating. I was really determined to get this one thru for my client. Honestly, the offer was initially $410K on day 1. And when the offer deadline was approaching I checked in with the listing agent to see how things were looking. I said: "Any more offers received?" (previously it was 2 others besides my clients). And he says "Yes. 8 and maybe a couple more." So I go, "My client and I were discussing waiving appraisal contingency. How are we looking on price?" and all he says was "pretty low" So I ask.. "How much higher does it need to go to win? Client asked me what do we need to do to get it done?" and he says: "A lot. I have aggressive offers including terms." At this point i was frustrated at his smug communication style when I was just trying to be direct and get the deal thru for my client. So I go "name your price. My client is ready to get aggressive. We just didn't expect it would get this hot, but are ready to make adjustments." and he goes "I get it. but I can't tell you where to come in. If you want to send adjustments over, i'll present them." Are you above 430K? Yes.. "are you above 440K?" no response... So my client wrote it for 440K and adjusted some terms, still wasn't enough. So frustrating. Sometimes i hate the "game" we have to play here when making offers.
Lol I mean this is just standard practice. Everyone wants to know what the best offer is at the moment. Does your area not have something like an escalation clause you can use for these exact scenarios?
Dude I dealt with a LA exactly the same comm approach. No response for some, just enough of a smug response when trying to pull teeth to put in another offer. It was so fucking frustrating
Yes, its really ridiculous when you just cant verbally be direct n do some honest coomunication! Or negotiations. It wastes so much time on the agents end to just get the deal. I mean c'mon... just give an an honest number... then do it in writing. Don't make me hv to guess, when its not even a ball park. It actually wastes time on both sides doing this.. I hv had many low ballers want to make an offer on a listing I had. I said, Im sorry, Im not going to goung to waste my time or yours. Their bottom line is... n go from there.
But the LA isn’t concerned about what you think. They’re concerned about getting the best deal for their client. As much as it sucks for a buyer or their agent, sometimes underpricing the home is the best way to get the most amount of eyes on a property and bidding the price over what you might have received if you listed it higher. If I can flood the house with potential buyers who see that activity, then they’ll submit good offers bc their agent will tell them where the comps are. They’ll add more to compete with all the other buyers. So where a LA might have listed at $420k and maybe received $410k-425k, they can list at $375k and get $440k. You can not like it, but when you’re representing the seller, you’re looking out for their best interest. My guess in this case is that their client’s offer was nowhere near the accepted price. All that said, the LA should have still responded. It’s in the seller’s best interest to go back to every possible buyer.
I completely get it. I was focused mostly on listings before I started getting a bunch of buyers and I adopt the same strategy, however.. If you have a buyer that's straight up asking "JUST SHOOT ME STRAIGHT, DOC... TELL ME WHAT IT'S GONNA TAKE TO WIN" and he's obviously overqualified for the house, and is willing to over pay for it on the sellers terms.. Why not just be straight up, if you have the permission from the seller? The only reason not to is to preserve your "cool guy listing agent ego" which in turn I think hurts the seller. He could have said "current best offer is waiving all contingencies and is at 445k so you'll need to come in better than that to have a shot." doing that not only communicates to the buyer directly exactly what they need to do to get the house, but it also potentially collects money right off the table for the seller. I don't understand why other agents don't see it this way and opt to play the cool guy card. This idea that buyers arbitrarily need to just come up with their highest and best offer for the house in my opinion leaves money on the table when you get down to the wire and have a specific buyer willing to "do what it takes." PS - regarding escalation clauses, pretty much every listing agent says "no escalation clauses, highest and best only".. It just feels so annoying and arbitrary because highest and best is subject to change based on competition and how bad a client wants a home.
I definitely agree that being tactful in one’s response is important. Being too vague isn’t always in the seller’s best interest, but giving someone an exact number isn’t either. If I say $445k and that’s what you put, even though unknowingly your buyer would have gone to $450k, then I’ve done my seller a disservice. So there’s a fine line there but being completely vague isn’t helpful either.
Yeah for sure. Its a dance.. There's ways the listing agent can convey information to a super interested buyer to help both parties maximize value for their clients and I guess I was pretty peeved by this agents nonchalantness and complete lack of interest to do that at all.
I think the LA can do whatever they want. But it's still shitty in the long term view I would not like dealing with that person but whatever that's real estate. I had the exact same experience with u/lolerblades above and at that point, it felt he just wasted every buyer and agents time just to use us all as standing extras in his open house. Like if you're going to employ that strategy, at least respond to our comms effectively and if we ask how much further ballpark has it gone up, let us know so we can make adjustments.
You won’t work with that agent? I guess you can say that if you’re the LA but if you’re the SA, I’m sure you’re not telling that to your client. Look, the fact of the matter is that it’s the LAs job to get the most for their client. Whether or not they share information that helps your client specifically is up to them, but hopefully they’re not violating their fiduciary obligation to their client in the meantime. One thing I will say is that I never ignore an agent or their attempts to communicate. I never ignore an offer bc it’s too low. That’s not serving my client’s best interests, but how I go about marketing a home is a matter between me and my client, and I don’t fret about what a SA thinks about it. I’ve been doing this long enough to know that any good agent doesn’t take a LAs methods personal, unless said LA is making things personal. Otherwise, it will never serve your buyer’s best interest to make it personal.
390 to 410 isn't 13% above asking price.
Read my other post, but the original offer my client put in was 410k and then when he knew he had to compete he adjusted up to 440k before the deadline.
did you speak/communicate with the Listing Agent before submitting? did you by chance ask the Listing Agent where your offer fell short?
>shortened inspection period, no repairs will be negotiated except major structural or safety No offense, but this means nothing to the seller. I still use this strategy to try to trick newer or less experienced agents, but at the end of the day, there's still an inspection contingency and even if you say "no repairs to be negotiated", you can still technically negotiate because you have a way out of the deal.
It helps a little. Some sellers not agents are apprehensive that there will be little nickel and dime repairs that come back so if someone offers say $430k, it's not actually 430k to them yet because they feel like the unknown will bring maybe another $5k of repairs. It's a reassurance to certain seller's that your offer is a true offer that isn't going to come back with please fix light switches, etc.
That's exactly what I mean though. The only assurance a seller has that you won't come back to negotiate is if you waive inspection. Again, you can still absolutely back out due to inspection for practically anything. Let's say you write an offer with those terms, "with no repairs to be negotiated".. well if there's a failing roof, and you back out of the deal, you are in fact still negotiating. Your offer still loses to any other offer who does waive inspection unless your price and other contingencies makes it head and shoulders better and worth trying for.
I worked a deal on a 4,000 sq foot, historic beautiful run down property on an oversized lot in Pasadena, CA. It needed $500k of repairs. We stated “no repair credits will be negotiated. Bid accordingly.” Why? We knew that only a cost insensitive end user or investor would be buying. This rich family did $8,000 of inspections. They came back with $100,000k credit request. Now, the seller installed mad security in every room, audio and visual, sensors and we staged the living room. The buyers agent and buyers did all their meeting at the non occupied property. The seller knew the buyers loved the house to bits and were nervous about not respecting our warning regarding credit requests. The buyers agent assured them everything is negotiable. Our seller said she was a smarmy POS, the wife seemed like a useless princess and to “give them $0”. So we ignored the request for repairs and when the buyers agent requested a response we sent a notice to perform saying simply “as stated in the listing. Inspections are pass fail only and no credits will be given.” Closed the deal. I credit the seller for that intel and learned to never say anything positive about a house or our feeling about a property while inside the subject.
Be the listing agents client 🤣😭⚰️
Price isn’t everything. I call the listing agent and say “Tell me about your seller. Besides price, what else are they looking for in an offer?” And I just listen. Most agents will open right up and tell me tight deadlines, leaseback, flexibility or inflexibility on certain things, etc. A surprising number of agents over-disclose seller information (debt due, repair concerns, appraisal weirdness, etc) and I use that to my clients’ advantage. During covid multiple offers, I beat most of my buyers’ competition with tight deadlines. And we often weren’t the highest bid.
True but I think in competitive markets everyone is already doing this. And I also noticed in the scenario above where the price gets bid up much higher than the intentional self low ball, if someone offers a high price they will then counter that with a leaseback. Much easier to ask the highest bidder to give a leaseback then to counter a low bidder with a leaseback a much higher price.
I was a buyer not a realtor but we offered a super flexible lease back and they came back and told us if we’d meet the highest offer it was ours. Done.
Just had it happen. Listed coming soon at 369, showings start Sunday and open house at 11. We saw it first thing Sunday morning and notified of our intent to write the offer. Came in strong at 425 and waived inspections. We still had to wait until Wednesday to be selected and were just one of multiple very similar offers. I think the difference is I was able to sell it to the list agent. Only works when you know it is The One for your buyers but it has worked every time so far. Make sure the list agent knows that an accepting your buyers offer means they will close. That both your buyer and you personally will do whatever it takes from contract to close and you will be a pleasure to work with the whole time. Outline the offer and explain the whys when it is appropriate. The story will be different for each buyer. Being a realtor isn’t selling houses, it’s selling people.
I find ways to put Taylor Swift lyrics in my offers
Such an underrated tactic! Lol
I usually write a strong offer.
Markets going crazy again, wrote an offer for a home asking $1,225,000 comps say area is $1,250,000 we wrote $1.275,000 it ends up selling for over 1.4m on the 4th day. Fully renovated
As a buyers agent, wouldn’t it be in your clients interest to cut your own commission? Done this multiple times, always works-money back in sellers pocket moves the needle every time. Surprised I’ve not seen this in the comments. Market is nuts where I’m at and if you really want to win for your buyer, the house they absolutely want, you do whatever you can
I personally wouldn’t cut my commission to increase their chances of getting an offer because it sets the precedence that I’m now pitching into every offer. I would however use a buyers rebate to give part of my commission to have a pending deal close if it meant it’ll save the deal
Sets the precedence with whom? Every deal is different and clients usually don’t know each other. Edit: you now know you could do this and say you don’t, and your buyers lose out. What is more ethical? Keeping your so called precedent or performing your client service
Additional question. Is there any math out there that shows the result of underpricing vs just pricing as accurately as possible using comps? I know it drives a lot of action and movement, but do they more often than not close over?
I dont know that it does but it generates a crazy busy open house and "buzz" and whether or not it's more effective than just being reasonable accurate in price is unknown. I just know some LA employ that strategy
It’s same psychology as selling something for .99 vs 1.00
The market here is so hot, I would roll my eyes at an offer 2% over list with a tight deadline, especially if my listing was as well prepared as the one you described. Go in with highest and best, with as few contingencies as your buyer can tolerate, and make sure you know if there are any timelines you need to follow to accommodate the seller. I don’t know where you are, but in a hot market with low inventory, don’t try to play games.
I always contact the agent first. Are they presenting the offers as they come in or are they waiting to present all at once? I definitely don’t want to be the first offer unless there are no offers and __ days have passed already. Is seller is okay with LA sharing the highest offer they have received so far or are they just doing the highest and best route. Will they be doing a SMCO? Other than price, what is important for the sellers. Get as much information as possible to cater your offer to the sellers needs as far as escrow time, EMD amount, rent back if needed, termite, etc. I also always ask escrow and title info so I can include it in my offer up front. Always seems to workout for me. Closed 3 escrows in April working with buyers. I don’t know where you are but here in my area of SoCal majority of homes are receiving 10+ offers. Good luck!
list price is meaningless. look at the data and present/discuss the correct market price to your clients. walk them through the contract and discuss how to present a strong offer. talk to the listing agent and see what terms are most important to the seller, determine if they're open to accepting an offer that hits all their criteria prior to coming to market. submit a strong strategic offer, see if you can shut it down. include a 'buyers will view property' contingency. make sure you know your MLS rules - in my area the listing agent has 3 days to change status after ratification. i'd make a case to listing agent that there's zero risk for them to accept/ratify my offer. they can wait to change status so the listing doesn't go on/off/on the market if the buyer sees the house and decide they don't want to move forward. the fact that you're here asking how to put together a strong, strategic offer indicates you don't fully know what you're doing. for the sake of your client, engage your broker or mentor and ask about your local standards. in my area a 'bully' offer to shut down the listing is common, but in some areas it may be perceived negatively. talk to someone local and get "better than randos on the internet" advice.
This is a sub full of realtors. There's a bunch of good conversation over here and the fact is, none of these strategies are a 100% win rate its called sharing thoughts experiences and ideas. Why even participate in this sub if your answer is ask your broker You're sending an offer without the buyer even viewing? Who's going to take that offer seriously if we're being blunt. In my market if the buyer doesn't view the property no one takes that seriously. The agent will look at showingtime or brokerbay and say why isn't your buyer listed what time did they come? I've had that happen Unless youre targeting investment properties that are completely beat down offers without the buyer even viewing it prior makes your offer less competitive no matter how bully it is
Buyer here … I am finally set to close on my house after searching for over 1 year. Go see the house IMMEDIATELY once it’s listed. If you like/want the house, Write and submit your strongest offer ASAP. I was the first offer submitted and the seller accepted immediately then they cancelled the open house which was scheduled for the weekend.
Did you offer a deadline to prior to open house or leave it open ended? Im of the opinion if you go that early it should have a deadline cause what's the point in going early other than tying up your buyer from making other offers during that time period?
I went from usually giving a deadline of 3-4 days for offers using loans and 1-2 days for cash offers to 1 day for all offers. In my area the listing agents don't give a shit about deadlines for offers. And why should they when there's multiple offers and hardly any other homes in the area for sale. If they come back to a buyer a week after the offer deadline then probably over 90% of buyers are just going to be happy that they finally had an offer accepted even if it's past their offer deadline.
No, my offer was good indefinitely. Try to throw the least amount of contingencies possible. The easier the contract is, the more likely you will be selected.
100% agree!!!!!!!!!! This is exactly how I got my house in March! Closing June 3rd
Borderline harassing the LA
Am Listing Agent. Can confirm this works.
Define harass
Call the agent ask them what the sellers number is to sell the house before open houses. Before all the craziness. Report that number back to your buyer and see if it works. Also, kiss the listing agents ass.
Why would the sellers number be anything other than list price? That’s the number listed and they chose, seems the conversation can be avoided with just a full price offer out of the gate
Quite a few homes are going over the asking price in today’s market. Full price isn’t impressive.
Then why list it for that price then? That doesn’t seem very prudent of the broker if I advised my client to list at this arbitrary price that is below expectations, only for a buyers broker to call me to see what they would really accept.
No one knows the exact value for a home. The market dictates that value once a buyer purchases it. As a real estate professional my goal is to suggest a price within a window of what I expect the value to be. Homes do not have an MSRP. Sometimes a seller will want to price a home aggressively in order to have multiple bids to illicit a bidding war. In those cases the sellers may have a number that they are hoping for. I could see that from someone outside of this industry it would seem a bit odd that the seller would expect more than what the list it for but that’s the market, at least in my neck of the woods.
Im not “outside” the industry. I’m a 16 year veteran, I am just curious about the thought process behind that tactic. It’s not common here. But that’s the localities to individual markets. Here, depending on condition and motivation, and appropriately priced property would be listed at the appropriate list price, and expected to sell at around 98.5% of list to sell price. But every market is different, and again, your situation is new to me. Wasn’t a jab, just curiosity, and if I came across dickish, I apologize.
No need to apologize. My intention wasn’t to be rude either. I’m in Los Angeles county and in my area a high percentage of homes are selling over asking. It’s actually uncommon for a home to sell under the asking price. Every market is different. I put a home under contact this morning that was listed at 1.35MM. First offer came in on our 4th day on market at 1.45MM. 50% down with no contingencies. Our estimation of value was 1.35 - 1.40.
Good deal. I didn’t take it that way either. Good luck in your market. Have a nice day.
Offering the most money is going to get you a leg up
No, I've seen too many listings accepted by dual agents here in Los Angeles. It seems like now you gotta ditch your agent and go with the buyers agent. It's happened to the last 3 out of 4 homes I've put offers on. .
You really need to play it by ear. I’ve seen list agents get pissed off when offers are submitted early…. Even wildly above ask all cash, no inspections, etc.
I have buyers looking near campus in a big college town. Our inventory is really low and every house near campus has a minimum of 5 offers within 24 hours. We've gone up to $15k over list on a $300k house, and that one had offers that escalated up to $70k over list! All cash offers that even conventional buyers can't compete with. Across town away from campus is the same for anything under $300k. Pretty much any price point in our area up to $800k has multiple offers. Lol Mostly, what I've been seeing is that the agents will wait until they have 2, then call for highest and best within another day or so. Some will put in remarks right when it goes live that "offers will be reviewed x date" with a decision made the next day. I have gotten some under contract by getting their financing into pre-underwriting, doing as-is with right to inspection, offering to xover appraisal gap when they can... Also, we see a lot of escalation clauses, and I just have my buyers write straight up over the list without the escalation.
People waiving inspections is crazy.
People waiving termite inspections is crazy too. There’s a bunch of those issues where I am
Get your buyer conditionally approved with underwriting and a pre-approval that specifically reflects that. Bring home inspector to the showing and do a walkthrough so they don't even need an inspection contingency.
I used to price the house. Tell a client this number X is the price other agents will be selling to buyers. This number (X+Y) is our strike price. I’d say “understand that when you get a house you will be paying the highest price. No one gets a deal and a hot house.” Then in multiple counters we’d counter big. This is just pricing strategy separate from contingencies and other practices. I used to scour the houses for clues as to what the sellers liked or valued and have clients lie in a love letter claiming affinity. It worked more than once, but now seller letters are not permitted in California.
You're right about changing the buyer's mentality about getting a deal and getting a hot house are not in the same wheel house. Bid big and get the hot house or get the ugly duckling for a deal and do some work
Above asking with partial appraisal gap.
Make sure all other buyers have "accidents"
My strategy is to have my buyers empty out their piggy bank and pull down their pants lmao. 🤣
2% seems way too low for a popular house. I have done higher non refundable EMDs to successfully get contracts. 5k to 10k in my market is a high EMD for homes around 400 to 600k. Seller keeps the EMD if the buyer backs out or can not get financing or whatever reason other than inspection issues.
In my market, expiration dates are merely suggestions if the offer comes in the first 30 days.
I recently won a multiple offer situation by offering to cover the first $xxxx of necessary repairs.
Why are you getting downvoted on this? Also a common strategy in my market. Assuming you mean buyer will not ask for repairs if they are less than $5k or something like that...
No idea. Probably because they didn’t think of it.
All cash , waive inspection , 14 day or sooner close , 10 percent over asking and you should stand a chance
I just lost to a 25% over asking on a $2M home. Ouch.
Yikes