The Trouble with Multiple Offers

I am working with five buyers, and ALL have been in multiple offer situations.  This is crazy.  I know; there is a housing shortage, not unexpected and loudly discussed in the news as one after the other builder went bankrupt during the downturn.  But this is beyond the ridiculous.  It’s like a feeding frenzy.  So here we are.  For a time the only homes that stayed on the market were the dog houses…the ones that needed some “TLC”.  Now, even they are getting multiple offers.  It takes above list price to ‘win’, and that’s often with zero concessions requested.

I remember how sellers got the stew beaten out of them during the market downturn.  They had to paint, install new carpet, dance, give up the firstborn child and give away the house to get it sold.  Maybe this is the universe balancing, but I see major issues arising.

Listen, there’s no question that the sellers benefit from this crazy market.  But here’s what’s happening.  House prices are being artificially inflated due to the high demand/low supply paradigm, and I don’t think many of them will appraise for these ludicrous prices.  I see a future of offers falling out during the appraisal process and buyers losing that chunk of money…because the lenders will SURELY make that a non-refundable, pay-up-front fee.  They’d be nuts not to.  Then, we’re going to have a boatload of people who buy high and get stuck when the market comes to its senses.  First time buyers don’t have the money to make up the difference between their offer and a lower appraised value, so in many cases they will lose the appraisal fee.  They can’t afford that.  Agents should protect these buyers.

I know, realtors get a bigger commission from a higher sales price, but the problem is, the buyer clients most certainly will feel the pain later when they try to sell and the feeding frenzy is over.  And let’s don’t forget the builder new home prices.  One builder company who started their pricing at 170 two years ago are now starting at 240.  That’s a huge jump in pricing in that amount of time and guess what?  They can do it and get away with it.  But it’s a bad idea.

I’m warning my clients up front about this situation, and most of them resist the urge to offer too much money…and of course some of the homes do justify the prices…but everybody needs to remember that we are going to be listing these artificially high priced homes down the road, and I remember how painful that was for sellers.

Of course it’s up to the buyer how they want to proceed, but good buyer agents should be spending time explaining what’s going on here.  And yes, I like to make money too, but not at the expense of my buyer clients.

I will say this though: It’s a snooze-you-lose situation out there.  Better have the OTP partially filled out and ready to fly when you go house hunting.  Man, it’s a fast market out there.  So I tell my clients this:  If you HAVE TO HAVE this house, expect to pay full list price and don’t even think about asking for the moon with regard to concessions.  And I remind them that there ARE other houses out there.

Moving Moving Moving

I’ve made a change, or ANOTHER change I should say.  I said goodbye to my Fonville Morisey family a few weeks ago and joined Coldwell Banker Howard Perry and Walston, Strickland Road office.  It was a bittersweet transition, as I left behind a company I loved and people whom I love as well.  These folks will remain family to me.  But I am excited about my future.

I am now a new family member at Coldwell Banker Howard Perry and Walston and am excited about this new part of my journey.  I hope you will stay in touch and wish me well in my transition.  So far it has been a very busy time.

Have a lovely day!

I Was Just Thinking….

I was looking at quotes online, things people say about life.  I noticed how many all-or-nothing quotes there were.  Like this: Either you grab it with both hands and swing or you miss it.  Or: We were meant to live life in vivid, living color or not at all.  Not exact quotes, but you get the drift.  After reading a couple hundred of them I had to stop reading.  Life is not like that.  In fact I think this idea of complete gusto, full living color, fireworks and loud music stuff rarely happens… for sane people, at least.

Life is not black or white, all or nothing.  Rather, it’s filled with infinite shades between, infinite amounts of life.  Sometimes its painful, or boring or lonely or stalled.  It just is.  I can’t imagine living as though I have to swing from the rafters every day, day in and day out.  How exhausting that would be, and how much great stuff on the ground would I miss?  The few times when life actually is all out, are great, and should be savored when they’re good.  But there’s max-out bad, too…and everything between…and THAT is life.  Like it or not.

If you’re being chased through the jungle by a cannibal, it would be great to be just greenish gray.  Imagine how “vivid color” would work for you.  You get the idea.