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60+ Offers Presented, Would YOU Write # 61...? What Are Your Chances?

What if you client ask you to write it? the seller can only accept ONE offer, what would be your contribution to this frenzy bidding? what about the other 59 Realtors? and their clients?  At what point would you say, I am not going to be a part of this frenzy bidding. Apart from that, what type of an offer would you counsel your client to write in order to have a chance to be the highest bidder? What would happen if you go too high and then the appraisal does not measure up? What would happen then? who's fault is it that this one sale went out of control? How much time was spent here by would be home buyers and Realtors?

Buyer's waiting

As I browsed this morning our MLS, looking for a house for a first time home buyer in Hayward, CA, I come across a very nice house in an average neighborhood slightly under-priced, (MLS # 40400913) It has been on the market for only 12 days, and I noticed the note from the listing agent "PLEASE NO MORE OFFERS, 60+ HAVE BEEN SUBMITTED, WAITING FOR A RESPONSE" My heart went out to this pour soul, I can imagine his fax machine spitting out offers at the tune of a minimum 17 pages per offer! 1,020 sheets of paper says my trusty calculator and then he/she will need about a day to sort them all out. And then fax that pile of paper to the bank. We are going to need another fax machine! The number of messages to be returned will need to be streamlined in a very unique way. Out of those 60 Realtors, there are bound to be some nasty calls about "What happened to my offer?"

This real estate market is showing us faces we have never seen before, this is early April 2009 in the San Francisco bay area, where according to the media prices have dropped, unemployment is high and nobody is buying... really? 59 out of these 60 buyers are disappointed and still without a house to buy.

There are some serious issues here. In the one hand the listing agent cannot put this house on the "Pending" side until an offer is accepted. On the other hand, the bank wants to see "any and all offers" so they can pick highest and best. Can a buyer sue you for NOT writing an offer on his behalf? Someone will have to take control of this mess and make the right call, choose the right offer, and hope the buyer does not flop before escrow closes, there will be a lot of people real mad if they have to run back up to that house to show it again and write another offer.

What would you do if a client ask you to write offer number 61? would you take the time to write it? If you were the listing agent, how would you handle such a mess. I truly want to know. I have been a Professional Realtor since 1985, I thought I had seen it all... I guess I haven't, enlighten me please. What would you do in both cases.

Antonio & Alexia Cardenas, "The Realtors In Motion" Selling the wonderful counties of Alameda and Contra Costa in the East Shores of the San Francisco Bay. Accepting Referrals to San Leandro, Castro Valley, San Lorenzo, Hayward, Pleasanton & Dublin. Visit us on line at www.ListedbyAntonio.com (510) 326-4263

 

The Realtors In Motion       Antonio & Alexia Cardenas   

                  "The Realtors In Motion" 

         CRS, GRI, E-Pro Certified. SFR (Short Sales, Forclosure Resource) Serving the east shores of the San Francisco Bay, Alameda county: specially the following cities: Castro Valley, San Leandro, San Lorenzo, Hayward, Oakland, Pleasanton & Dublin.

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www.listedbyantonio.com or call (510) 326-4263

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Comment balloon 11 commentsAntonio & Alexia Cardenas • April 05 2009 01:03AM

Comments

Antonio & Alexa,

When there are many offers, this means that the Listing agent screwed up. This means that the price is not set right. A few days ago we submitted a full price cash offer on a cnodo-hotel unit. Short sale. Friday the agent called and said that the Lender did not approve the offer, and countered at 50% higher.

I can only say that the bank somehow knows the values better than a local agent. So, she might have had several offers, but she simply lowballed it.

If the Buyer asks me to write a 61st offer, that means that the property should be way more expensive. Of course, I will write the offer. I will run a CMA and determine the value, and then will act according to what we agree with the buyer.

I also think the broker should carefully look at how the agent managed to under price the property, so that there are so many offers. If he/she does not do it, the Seller then may figure that something is wrong here and sue the agent.

Posted by Jon Zolsky, Daytona Beach, FL, Buy Daytona condos for heavenly good prices (Daytona Condo Realty, 386-405-4408) about 11 years ago

Antonio and Alexia,

I would write the offer.  I would also NEVER tell anyone not to bring me another offer.

Posted by Brenda Harmon (Century 21 Beal, Inc College Station, Texas) about 11 years ago

I would not. .plenty more when they came form. .. .BTW you have a very original picture. . great branding!  congrats

Posted by Fernando Herboso - Broker for Maxus Realty Group, 301-246-0001 Serving Maryland, DC and Northern VA (Maxus Realty Group - Broker 301-246-0001) about 11 years ago

I can't imagine that the bank wanted to see 60 offers.  No house is that spectacular that it would garner that many offers unless it was underpriced.  It would be interesting to see what the final price is as compared to the list. 

Posted by Cindy Jones, Pentagon, Fort Belvoir & Quantico Real Estate News (Integrity Real Estate Group) about 11 years ago

In my experience, usually when there are multiple offers - even if only two - the bank will just come back and ask for "highest and best" before they take a closer look.  That'll give buyers a chance to reevaluate their original offer, change it or eliminate themselves from them bidding to move on. 

Posted by Silvia Dukes PA, Broker Associate, CRS, CIPS, SRES, Florida Waterfront and Country Club Living (Tropic Shores Realty - Ich spreche Deutsch!) about 11 years ago

I'd take a pass, the listing agent must be buried in minutia and the asking price must have been crazy low to attract so much paper.  Counsel your buyer, this situation is a loser for everyone involved IMHO.

Posted by John Secor (EXIT Real Estate Results) about 11 years ago

Jon, interesting point, what I find often in my market is that there appears to be a lot of Realtors I never hear of, people from other areas that do not know the local market, this might have account for the fact that this house was clearly undervalued. This is an REO, did someone did a BPO?

Brenda, yes, I would write the offer also but will look into the buyers motivation, if the buyer just wants to go full price or lower it probably will not work. I will be keeping an eye on the final selling price to see how far it went.

Fernando. I had the same feeling. What are are real chances of writing #61...? after #40 I probably move on to another house, I will have to ask the buyer to go way above the asking and then risk that the appraisal will shut the transaction down, what a waist of time that would have been. (Thanks for the comment about our picture)

Cindy, I agree with you, the neighborhood is just average, the house is apparently very nice, but not exactly the place to die for. I want to see if at the end I could chat with the listing agent and perhaps selling agent and maybe post the result in another blog.

Silvia, I don't believe that the bank with 60 offers will go back and ask for highest and best, with that number of offers "highest and best" should stand out real quick.

John,yes, indeed there will be several losers with a transaction like this one. the second highest is the first loser! 48 others will follow. Even the listing agent will have had to do a lot of extra work just handling the paper work.

 

Posted by Antonio & Alexia Cardenas, "The Realtors In Motion" (Alameda County - San Leandro, CA.) about 11 years ago

I've seen it once, when one of my co-workers received 54 offers at the height of the market.

I, too, believe that when there are these many offers, the price is unrealistically low. If the agent deliberately set the price to pique interest and stimulate demand, he seriously underestimated the market. And yes, he just created a lot of work for himself.

Was this a short sale or REO? The bank will pretty much dictate what they want to see. I once handled a short sale for another realtor who went on vacation. The loss mitigator told me she only wanted to see the top two best and highest offers. The list price for this contractor fixer in a desirable neighborhood in Alameda was $300K with estimated costs to repair at $200K. Fixed up, it could be worth $600K.

By the time I received the 13th offer, I began telling the agents who called that unless they can offer $395K or more, that they shouldn't bother sending an offer because the lender will only look at offers at that price or over.

Curiously, and in spite of what I told them, some agents asked if the bank will look at low ball offers, some below list price. When I said they'll only be wasting their time, they got the message.

It was fine to share this requirement because that's what the lender instructed me to do. I also called every single agent who submitted an offer to gve me their best and highest offer, and that i was only obligated to present the top two. Only one agent revised his offer. The others stood firm.

Had I not done this, we would probably have reached the 50 plus range, too, since there were at least 10-12 calls a day until we sent the top two offers. The winning bid: $400K, all cash.

 

Posted by Pacita Dimacali, Alameda/Contra Costa Counties CA (Alain Pinel) about 11 years ago

Pacita, thank your for your input, it does create a real bad situation for everybody involved, we just went to present another offer on a house in San Leandro... 30 offers! C U at the Tango Class!

Antonio

Posted by Antonio & Alexia Cardenas, "The Realtors In Motion" (Alameda County - San Leandro, CA.) about 11 years ago

Antonio and Alexia great blog post here most who attended auctions don't get it I have blogged many times about problems... then I receive calls bail them out of purchase LOL

Posted by Lynn911.com ~ Dallas Real Estate Agent Top Team (Dallas Houses for Rent Dallas Apartment Rentals Lynn911.com ) almost 11 years ago
correct and ethical thing, at least I know there is a setysm in place to encourage compliance and enforce the Code of Ethics when it is violated. Related Posts:How Much Shadow Inventory' Is There?How to File an
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